Category: Laws & Regulations

Damning ShareSoc Press Release on Digitisation Report

ShareSoc have issued a press release on the Final Digitisation Report issued by Sir Douglas Flint. It is highly critical of some aspects of the report and quite rightly so. See https://www.sharesoc.org/sharesoc-news/digitisation-taskforce-report/

Mark Northway, ShareSoc Policy Director, included these comments in the press release: “It fails to protect key shareholder rights and introduces dangerous financial incentives which will further erode investor engagement.

It is particularly disappointing that the taskforce has chosen to prevent investors from leveraging digital technology to communicate between themselves by email. Without the threat of shareholder activism, many of the corporate governance improvements of the past twenty years would not have happened.”

If the Flint report is adopted without major changes it will set back shareholder representation by many years.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Financial Advice – Does it Help? 

To follow on from my previous blog post, simplifying financial advice may help some people but one key question is: “Does financial advice actually improve wealth?”

The FCA attempted to answer that question in a Research Note – see https://www.fca.org.uk/publication/research-notes/bridging-advice-gap-estimating-relationship-between-financial-advice-wealth.pdf .

Here’s a key paragraph from the report: “Our findings suggest that financial advice positively supports wealth accumulation, especially in the initial years after advice is received. Our empirical findings reflect the qualitative insights from the literature which suggest financial advice helps consumers to avoid costly mistakes. Examples of these costly mistakes include inefficient tax planning, excessive cash holdings, or a non-diversified wealth portfolio. The short-term benefits of receiving advice could reflect consumers taking informed decisions that avoid these issues, providing an initial boost to wealth”.

One key message is that taking some financial advice is particularly worthwhile if you suddenly become richer.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Biggest Financial Advice Shake-up in More Than a Decade 

 I have just been reading an FT article with the above title. The FCA is to change the regulations about financial advice so that companies can give “targeted advice” but without getting into the costly need to give personalised advice by doing a full customer review. At least that is what I understand it to mean.

What’s wrong with the system at present? Those who most need such advice as they are financially ignorant tend not to get it because it is too expensive. The feeling is that many people are keeping too much cash in savings accounts rather than investing in stocks or bonds that would give better long-term returns.

Will this be a solution? Perhaps but it is not yet clear (to me at least) how this will work in practice and what exactly is “targeted advice”. The details of how this will work have yet to be disclosed.

I would suggest this is a poor solution to the problem. The better answer is to get folks more educated so they make the right choices when investing or saving. Education of the young in schools and colleges is not good enough so they fail to learn how to manage their own money well and how the financial world works.

Did the FCA actually consult those folks knowledgeable about financial matters rather than just those making money from retail investors? I do not recall any such consultations. This looks like an idea thought up by financial institutions to avoid giving personalised advice and will just be a cheap way around the problems that currently exist. It may protect those who currently provide advice from their responsibility to give appropriate advice but that is not what we need.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Assisted Dying Won’t Be Easy

The Assisted Dying Bill was passed in the Commons last week, but if you think that will make it easy, think again. Health Secretary Wes Streeting has said there is no budget for an assisted dying service. The Bill is not only complex but requires legal and medical advice to make sure you or your carers and doctors don’t make it invalid.

There is probably a business opportunity here that someone might wish to take up. The provision of low cost legal and medical advice to someone who wishes to invoke the new law is a service that is required. A register of doctors who are willing to assist would also be a good idea.

In the meantime, expect a rearguard action by those who oppose the Bill in the House of Lords with numerous impractical amendments put forward which will surely be rejected when the Bill returns to the Commons.

Don’t let us lose this opportunity to provide support to people who want to die.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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New Market for Private Shares – or an Opportunity for Exploiting the Gullible?

The Financial Conduct Authority (FCA) have announced that PISCES, a new market for private (i.e. unlisted) shares will launch later this year. To quote from the announcement: “PISCES is a new type of platform where shares in private companies can be traded. It will open the door to more opportunities for investors, facilitating their access to growth companies. Private companies can tap into a broader range of investors and asset managers and PISCES offers exits for shareholders to sell up. As companies choose to stay private for longer, there is demand for investors to trade private company shares easily and efficiently in an organised marketplace. PISCES meets this demand by allowing secondary trading of these shares. Companies can set the floor and ceiling of share prices, and have a say over who can buy their shares”.

But will there be liquidity in the shares traded on this platform? And will investors get all the information required to make sound judgements about the merits of private companies?

There may just be big new opportunities to promote dubious companies by the wide boys who frequent financial markets.

See https://www.fca.org.uk/news/press-releases/fca-rings-bell-new-type-private-stock-market-growth-boost for more information.

The Investors Chronicle published an article last week entitled “The next 30 years of AIM”. In my view AIM has not been a success, particularly of late. Companies have been leaving AIM because of high listing costs and general reputational concerns (too many AIM companies have turned out to be run by dubious characters, with fraudulent accounts).

Although I personally have had some good successes investing in AIM companies, I have also had some failures which have offset the good ones. I now take great care about investing in AIM companies and never touch new IPOs.

How to fix AIM? Tougher listing rules are required such as longer track records.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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New FCA Investigation Scheme and Blasphemy Laws

The Financial Conduct Authority (FCA) have published a new Enforcement Guide which may improve their performance. Too often investigating potential offences takes too long and progress is hidden from those affected.

The FCA says: “we recognised that our average investigation times were too long. We have focused our portfolio of enforcement cases in line with our strategic priorities and significantly accelerated our investigations. 

Our consultation included proposals for a new investigation publicity policy to provide a measured increase in transparency under a ‘public interest’ test. Following feedback to our consultation, we revised these proposals and limited the resulting policy changes”.

See https://www.fca.org.uk/publication/policy/ps25-5.pdf for details.

Another legal shortfall has been the recent conviction of Hamit Coskun who was found guilty of a religiously aggravated public order offence, namely, disorderly behaviour within the hearing or sight of a person likely to be caused harassment, alarm or distress by burning a Koran.

Mr Coskun said: “This decision is an assault on free speech and will deter others from exercising their democratic rights to peaceful protest and freedom of expression. As an activist, I will continue to campaign against the threat of Islam. Christian Blasphemy laws were repealed in this country more than 15 years ago and it cannot be right to prosecute someone for blaspheming against Islam. Would I have been prosecuted if I’d set fire to a copy of the bible outside Westminster Abbey? I doubt it.”

The Free Speech Union (FSU) has supported the legal opposition and subsequent appeal. See https://freespeechunion.org/

My opinion (being an atheist) is that the law should not interfere in religious matters or any attempts to limit free speech on the grounds that someone might be offended by religious opinions. Please support the FSU.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Tariff Wars and Reform In-fighting

The Investors Chronicle editor (Rosie Carr) led with an article this week on the tariff wars that have broken out – headlined with “Facing up to America First”. High tariffs (i.e. taxes on imports) are certainly extremely damaging and should be avoided if possible. They reduce trade and raise the cost of products that cannot be easily replaced by domestic production. Inflation tends to rise as a result.

She concludes with this statement: “Even if these fears are overdone, lack of diplomacy and disregard for consequences do not bode well”. But I just see it as the consequence of ignoring the trade imbalances that have been allowed to rise in recent years with unfair tariffs and taxes imposed on US products by other countries.

For example, UK car exports to the US attract a 2.5% tariff, while US exports here face a 10% tariff. This is one reason why there are not many US manufactured cars on UK roads and that has been the position for many years. With this price barrier, it is not practical for US car manufacturers to build European model cars as the market is simply not large enough.

In other words, Europe and the UK have brought US attempts to rectify the imbalances upon ourselves. Donald Trump has been right in taking steps to rebalance the situation even if he has done so rather abruptly.

The Japanese and Europeans almost destroyed the US car industry in the last 50 years by lower costs and technological innovation while protecting their own home markets by tariff and other regulatory barriers. This needs to be stopped. Other products and markets have been corrupted in similar ways.

Reform Party In-Fighting

As a supporter of the Reform Party, I am somewhat dismayed by the latest spat among the leadership. Rupert Lowe, M.P., has been making public some of the issues. But having a public debate on them is not the way to behave for a Party that wants to be seen as being a responsible organisation.

They need to all calm down and resolve their issues and complaints in private! If Rupert Lowe cannot follow the leadership he should depart to other pastures.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Copyright in the Modern World

Before I move on to more serious matters, is it not appalling that politicians are spending a lot of time arguing about who started the war in Ukraine? There are many sides to that argument. Actions by Ukraine, Russia and surrounding countries including the USA all contributed to pushing Russia into invading. Shots were fired well before it turned into a clear invasion. There does seem to be a willingness to try to reach a peace agreement and that needs to be urged on all parties.

Copyright and Artificial Intelligence. That is the title of a public consultation published by the Government in December which is about to close.

Copyright has historically been designed to protect and financially support the authors of literary works. But the scene is being clouded by use of AI Models trained on existing material available on the internet and used to create new “works of art”. Cribbing material from other authors is nothing new. William Shakespeare copied some of the plots of his plays from other literary works. But it’s getting more and more difficult to identify the creators of new material where AI software is being invoked.

As the foreword to the latest consultation says: “At present, the application of UK copyright law to the training of AI models is disputed. Rights holders are finding it difficult to control the use of their works in training AI models and seek to be remunerated for its use. AI developers are similarly finding it difficult to navigate copyright law in the UK, and this legal uncertainty is undermining investment in and adoption of AI technology. This status quo cannot continue. It risks limiting investment, innovation, and growth in the AI sector, and in the wider economy. It effectively prevents creative industries from exercising their rights”.

If you are the author of published books or other written material, as I am, this should concern you. I have submitted a brief response to the consultation which closes on Tuesday (the 25th Feb). But this is a very complex subject and I think it needs extensive thought and discussion before any proposals to change UK law are firmed up.

The consultation is here: https://www.gov.uk/government/consultations/copyright-and-artificial-intelligence/copyright-and-artificial-intelligence . If you have an interest in this area, please respond.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Bed Blocking and One Solution

Bed blocking in the NHS is a serious problem. For example, it is estimated that in 2024, over 12,000 patients in England were in hospital who no longer needed to be there. Many of these are due to care planning delays and basic lack of adequate provision for suitable accommodation, but some are due to the patient’s refusal to leave.

This was highlighted in a recent legal case where the NHS applied to the court for a possession order. That was granted. The patient had been there for 18 months and from photos of her hospital bed had clearly settled in. With free meals and other facilities this might seem to be a comfortable life but is not medically sound. Long-term lack of physical activity is not good for any patient.

A full report on this case is present here:  https://localgovernmentlawyer.co.uk/healthcare-law/174-healthcare-features/59982-bed-blocking-possession-orders-and-discharge-planning

Local Government Lawyer is a web site that reports on many interesting legal cases, particularly in local councils and other public bodies. It’s worth signing up for their free newsletter if you have an interest in such matters. With lawyers and legal decisions interfering more and more in our lives, which is much to be regretted, it’s worth keeping an eye on.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Heathrow Expansion, Lower Thames Crossing and Just Stop Oil Sentences

The Chancellor is backing the expansion of London Heathrow Airport with a third runway. This has of course been proposed in the past but plans have always been thwarted by political and legal opposition. Rachel Reeves believes it would assist her plans to grow the economy, and it should be pushed through. Even if she manages to overcome all the hurdles it could be many years before we see the new runway.

Is it necessary and a good thing? The issue to my mind has always been the increased noise and pollution from expanding this airport in a London suburb. A much better plan has always been to build a new airport to the east of London on Maplin Sands or elsewhere in Essex/Kent.  

Other alternatives are expansion of Stansted, Luton or Gatwick airports, or even better, expand regional airports. Is it really necessary to have people travelling from all over the UK to Heathrow just to catch a plane to their ultimate destination? It is not and the financial cost of expanding Heathrow is enormous – for example it requires major alterations to the M25/M4 which will add months of disruption to key roads.

I have always opposed Heathrow expansion and will continue to do so because of opposition to the noise that it causes that affects a very wide area of London. Heathrow Airport is also one to avoid in my opinion by any sensible traveller.

Lower Thames Crossing

Apparently the Chancellor is looking at a private finance deal to get the Lower Thames Crossing built. This is a tunnel near Tilbury to divert traffic from the Channel ports to avoid them using the M25 and Dartford Crossing. This is a very worthwhile project that makes a lot more sense than expanding Heathrow Airport.

Just Stop Oil Appeals

Yesterday appeals were heard in the Court of Appeal over the sentences on Just Stop Oil protestors who blocked the M25 for 4 days. That included 5 years for Roger Hallam who helped to organise the protest. Were the sentences justified? Well the cost imposed on the millions of road users who use the M25, and the general inconvenience caused do justify stiff sentences in my opinion. That is particularly so after Hallam in April 2024 was given a suspended two-year sentence for attempting to block Heathrow Airport with drones. Basically he and his supporters are persistently attempting to disrupt normal life. These are not “peaceful” protests – they aim to cause the maximum disruption they can just in the cause of bringing their views into public attention.

I hope the Appeal Court will not be sympathetic.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.