The Labour party is commissioning an independent review of the corporate auditing and accounting regime in the UK, with shadow Chancellor John McDonnell declaring ‘no more Carillion scandals on Labour’s watch’
The review will be led by Professor Prem Sikka, who is professor of accounting and finance at the University of Sheffield. It promises a crackdown on current practises in the industry as highlighted by the joint parliamentary committee inquiry into Carillion.
Speaking at the party’s ‘State of the Economy’ conference in central London, McDonnell said the review will also consider whether regulatory bodies should be merged, abolished or restructured and what penalties or fines should be imposed in future.
McDonnell said: ‘Our regulatory system is simply not fit for purpose. The financial sector alone has at least 29 overlapping regulators, including the Faculty Office of the Archbishop of Canterbury. Some professions are self-regulated.
‘This regulatory maze creates enormous opportunities for waste, duplication, obfuscation and buck-passing.
‘We need a complete overhaul of the entire regulatory framework for finance and business, to promote openness, transparency, accountability and – yes, where necessary – to impose appropriate punishments.
‘Under the next Labour government the big six firms will not be allowed to continue to act like a cartel that prevents new market entrants or drive down standards.’
Following the review, McDonnell said the aim was to bring forward reform proposals to the Labour party conference, the party’s policy making body, in September.
Report by Pat Sweet
