By ALEX BRUMMER, CONSULTANT EDITOR
The cloud of mistrust surrounding British finance will not be lifted by the Supreme Court ruling on motor finance.
Modern history of the Square Mile is littered with examples of unwitting consumers being gulled into buying products they don’t need and being cheated by finance providers.
Pensions mis-selling and payment protection insurance come to mind.
The Great Financial Crisis of 2008 may be a distant memory, but it was only two months ago that NatWest escaped from government ownership after an eye-popping £45.5billion taxpayer rescue.
Indeed, the lingering costs of 2008 and the compensation culture it engendered are among the reasons why the UK’s public finances are in the worst condition since the 1950s.
Yet despite this, the Chancellor Rachel Reeves felt it was fine to go to the Mansion House and declare it time to place ‘the boot on the neck’ of the red tape of financial regulation.
Let-off: The Supreme Court sided with major lenders in their car finance scandal ruling, sparing them a collective £44bn compensation bill
Quite the contrary. After scandals such as motor finance, the collapse of the Neil Woodford investment empire and the London Capital & Finance mini-bond scam, ever more vigilant enforcement is required if consumer confidence is to be nurtured.
Tracing back victims of motor finance scandals to 2007 will be hard, and finding the data difficult.
Yet it is unbecoming for Stephen Haddrill, who represents the Finance and Leasing Association, to shout foul and describe the proposal to pay out up to £18billion in compensation as ‘completely impractical’.
‘Caveat emptor’ is fine as a mantra, but we shouldn’t underestimate the deviousness of second-hand car merchants acting as agents for finance groups.
I recall buying a second-hand VW and being told by the dealer that he didn’t want cash because he would miss out on finance commissions.
Investors in Lloyds Bank, Close Brothers et al yesterday enjoyed a relief rally at the expense of consumers treated unfairly.
They should not escape retribution for unfitting behaviour.
There is a prevalent view, fuelled by fee-hungry investment banks, that fending off private equity offers for FTSE-listed companies is impossible.
Yet the bidding war which ended up with Primary Health Properties (PHP) fending off KKR and merging with rival Assura shows there are other choices.
The outcome should be a plus for the NHS as it adopts Wes Streeting’s desire to switch from big hospital provision of medical services to community-based health.
PHP and Assura fended off private equity by fully engaging UK long-investors with 35 per cent of the votes, such as Schroders and Baillie Gifford.
If the deal is approved next week, then it could free up to £300million for investment in updating and expanding facilities and building new health hubs.
This is a more satisfactory outcome than some other recent private equity bids.
Corporate ghouls Advent outbid rival KKR for Spectris, a vital British precision engineering firm which serves two critical industries: pharma and semiconductors.
It is disappointing that no white knight offers emerged or that the Spectris board showed such little fight.
Similarly, at a time when warehouses and data centres are all the rage, Warehouse REIT threw in its lot with Blackstone, reversing a decision to merge with Tritax Big Box.
As customers of private equity-owned vet practices and dental surgeries would testify, unscrupulous owners rarely benefit the end-user.
All hell has broken loose after Donald Trump fired the independent Bureau of Labour Statistics commissioner Erika McEntarfer because he didn’t like ‘rigged’ jobs data which didn’t suit his claims.
The reality is that there is concern among some economists about the quality of data which showed that 258,000 fewer US jobs were created in May and June.
Sound familiar? Here, the head of the Office for National Statistics Ian Diamond stepped down in May and UK Statistics Authority chair Robert Chote resigned in July. The departures came amid loud criticism from the Bank of England, among others, of poor labour force data.
Lies, lies and damned statistics...
