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FRC to investigate PwC audit of Berkeley Group

The probe will look into joining of a former PwC partner on Berkeley’s board.

The Financial Reporting Council (FRC) has opened an investigation to find whether professional services firm PricewaterhouseCoopers (PwC) acted independently while conducting the audit of the Berkeley Group Holdings.

As part of investigation, the British accounting watchdog will look into PwC’s audit of Berkeley’s annual financial statements for the year ended 30 April 2012 under the Accountancy Scheme with a particular focus on the joining of a former PwC partner on Berkeley’s board last year.

PwC partner Glyn Barker joined Berkeley’s board as a non-executive director in January 2012, after serving the accounting firm for 35 years. Barker was most recently vice chairman of UK at PwC.

Confirming the receipt of the investigation letter, PwC in a statement said: “We will continue to fully cooperate with the FRC’s enquiries. We take our independence responsibilities very seriously.”

Berkeley, a house-building company based in Surrey, did not comment on the probe. However, Tony Pidgley, the founder and chairman of Berkeley, told Reuters: “As far as we’re concerned Glyn has had a very distinguished career and we are very pleased to have him on the board.”

Last month, FRC launched an investigation under the Accountancy Scheme into the accounting and auditing of interest rate swap arrangements which gave rise to a prior period adjustment in the financial statements for the year ended 31 December 2012.

FRC, which did not reveal the time line of the investigation, operates independent disciplinary arrangements for accountants and actuaries. It oversees the regulatory activities of the accountancy and actuarial professional bodies.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.