Insurance advisers tax the shadow chancellor

City Diary

John Willcock
Thursday 01 August 1996 23:02

Remember all the fuss shadow chancellor Gordon Brown made recently about accountancy firms offering tax avoidance advice in case Labour get in and increases tax rates?

Insurance broker Sedgwick Noble Lowndes is now offering similar advice. It may detonate a similar volcano on the opposition front benches.

Sedgwick has sent an investment newsletter to its clients entitled Planning for the next election. It warns that a new government may target income from trusts "for some anti-avoidance measures".

"The possibility of a Labour government is always good news for those in the offshore fund business, the reaction for many investors being to get their money offshore."

The letter further warns investors to take some common sense actions "now to mitigate any increased burden of taxation in 1997 and beyond".

It seems that however far to the right Tony Blair drags his Party, there are still people willing to play the tax card.

City spin-doctors Brunswick has sent me a letter pointing out the vital difference between Sumitomo Bank and Sumitomo Corporation.

"You will be aware of the recent news about the losses incurred by Sumitomo Corporation in their copper trading operation.

"There have been a number of articles in the press recently where, at best, it could have been difficult for a reader to differentiate between the Bank and the Corporation. At worst, articles have said or implied that Sumitomo Bank was undertaking the copper trading which led to the losses."

Perish the thought. In fact, the Bank and the Corporation were legally separated just after the Second World War. The former grew to be the world's biggest bank by 1994, then fell down the league table as Japanese banks wrote off huge property losses. The Corporation is a commodities trader.

So there you are. The Bank is heavily involved in property and project finance, and has nothing to do with the Corporation. Apart, that is, from a 5 per cent holding.

Congratulations to PR hackette Karen Roberts, nee Fry, of Financial Dynamics, who has just returned from her honeymoon with hubby Martin. Mrs Roberts spends much of her time with property clients, while Mr Roberts himself works for property surveyors Knight Frank.

One FD colleague quips: "Karen loved her job so much she married it."

Lloyd's rebel names were incensed that their ultra-top secret meeting with Lloyd's chairman David Rowland on Wednesday was rumbled by the press. The Paying Names Action Group, which is threatening to apply for a Judicial Review to overturn the proposed rescue offer, demanded to know from our financial editor yesterday exactly who had blabbed.

The informant was Barry O'Brien, the Freshfields solicitor who is advising Lloyd's on the rescue plan. He burst into a press conference half-an-hour late on Wednesday, apologising profusely. On being asked where he had been, Mr O'Brien happily explained - at the secret talks with the Action Group.

No change there, then, The Lime Street insurance market has always been as leaky as a sieve.

The administrators trying to sort out the Sunday Business newspaper are now touting it for sale. An ad has been placed in the FT by administrators Royce Peeling Green but no circulation figures are available at the moment. When Tom Rubython launched the paper over three months ago, he said it needed to sell 150,000 copies to break even. It last announced sales figures a month ago of around 40,000, and since then, a deathly silence.

I'd offer to buy the company for 2.5p myself, but only if it comes without the liabilities.

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