Thursday, 16 March 2017

Thursday, March 16, 2017 Posted by Hari No comments Labels:
Homeowners 'earn' up to £4k MORE a month from their properties than going to work: Ten places where property inflation makes more than your job
The average rise in house prices is outstripping post-tax earnings in a third of local authority districts, according to the report by Halifax, which highlights the gulf between wages and property inflation that is triggering a property crisis. The biggest gap between house prices and earnings is in London's Haringey, where the average home rose in value by £91,000 more over two years than the median earner living there took home after tax. Haringey, in North London, covers an area that includes parts of Finsbury Park, Wood Green, and Tottenham - all areas not typically considered expensive, but which have seen house prices rise rapidly in recent years. The huge gap there was down to house prices in the area rising by an average of £139,000 in the last two years, while median take-home earnings for those living there were £48,353 during the same period. That is a difference of £91,450, or the equivalent of £3,810 per month, according to the report by Halifax. The figures highlight how even in locations not traditionally considered upmarket, house prices are spiralling beyond the reach of the average family. Across the UK as a whole, property price rises outstripped post-tax earnings in 31 per cent of local authorities, up from 28 per cent in 2015, the report revealed. Yet, while this means that almost 70 per cent of areas at least saw post-tax wages match the rise in house prices, the property problems facing people living there remain substantial. Even in South Tyneside, in the North East, where median net earnings of £39,033 were higher than the £35,709 change in house prices, someone hoping to buy the average home would have had to save all but £3,324 of their post-tax earnings just to match the rise in the cost of the property. DAILY MAIL

Budget 2017: Until 2020s the poorest third will be even worse off than after the financial crisis
The UK is on course for an unprecedented 15 years of spending cuts and lost pay growth the Resolution Foundation said. It will leave the poorest third of households worse off than in the years after the financial crisis, it said. Torsten Bell, director of the Resolution Foundation, said: "Britain is set for a return to falling real pay later this year, with this decade now set to be the worst for pay growth since the Napoleonic wars. Some households will feel the pinch more than others. The combination of weak pay growth and over £12bn of benefit cuts means that for the poorest third of households this parliament is actually set to be worse than the years following the financial crisis." According to its analysis of the Budget, the Resolution Foundation, which says its goal is to improve lives for people on low and modest incomes, predicts that average earnings are only set to return to their pre-crisis peak by the end of 2022. On public finances, it said that despite the downward revision to borrowing forecasts, the UK was only on course to meet the government's objective of eliminating the deficit in 2025. If it does so, that would be 15 years after the previous chancellor, George Osborne, had started implementing spending cuts and raising taxes. BBC NEWS

16,000 families a year forced to live in half-built new homes as developers 'cut corners to hit targets' and boost profits
When Jordan Barker, 34, and his wife Lindsey, 35, were handed the keys to their new Bovis home in March 2015 their hearts sank. The couple, who have three children — aged seven, five and three — paid £465,000 for the four-bedroom house in Reading, Berkshire. But they arrived to find 15 workmen still finishing jobs. The windows were missing in the bathroom and utility room, and someone was replastering the living room ceiling where there had been a leak from the shower above. As the months went on, the couple discovered more problems. The front door lock worked only some of the time, the door needed realigning, the carpet needed relaying and the whole house needed replastering and repainting. In the kitchen dining room, the tiled floor continued under a wall and protruded into the living room. The garden path also hadn't been laid, leaving bare ground littered with rubble, screws and nails. In total, an exasperated Mr Barker found 176 separate 'snagging' faults and was driven to putting up Post-It notes around the house, pointing the builders to each one. It took until last November for the problems to be fixed — 19 months after the family moved in. The Barkers have since received £2,000 as a 'goodwill gesture' from Bovis. As the Mail revealed this week, almost 16,000 families a year are having to move into new-build homes that have not been finished. Many firms have set tough targets to cash in on huge demand — and meet the Government's pledge to build 200,000 new homes a year. Thousands of victims of poor workmanship have formed groups on social media websites such as Facebook, including Taylor Wimpey Unhappy Customers, Avoid Persimmon Homes and Bovis Homes Victims Group. Paula Higgins, chief executive of HomeOwners Alliance, says: 'You have more consumer protection when you buy a toaster. A report by the All-Party Parliamentary Group for Excellence in the Built Environment found more than nine in ten buyers report problems to their builder. Now MPs are privately lobbying the Government to intervene, fearing that standards are falling as builders rake in huge profits. Britain's biggest house builders nearly all reported soaring profits last month. Persimmon reported a pre-tax profit of £783 million for 2016 — a 23 per cent increase on 2015. Barratt Developments saw a 20.7 per cent rise to £682.3 million, Bellway a 36.5 per cent rise to £492 million, Redrow a 35 per cent rise to £140 million and Taylor Wimpey a 21.5 per cent rise to £733.4 million. DAILY MAIL

Weak pound has turned UK companies into 'sitting ducks' as US and Asian giants circle to buy our biggest firms
US and Asian firms will continue to circle the UK's largest companies as sterling's slump and the resilience of the UK economy lays fertile ground for deals, a report has suggested. Andrew Nicholson, the firm's head of M&A, said: 'International buyers emerged as a real force to be reckoned with towards the end of last year, as overseas trade acquirers - most notably those from the US and Asia - acted opportunistically to take advantage of a weakened sterling.' In July last year Japan's Softbank agreed to acquire ARM Holdings, the giant UK semiconductor firm that supplies part of the chip design used in Apple iPhones, in a deal worth more than $32billion. Shortly after popular flights website Skyscanner was bought by Chinese giant in a deal worth £1.4billion - another UK tech star to fall into the arms of a Far East owner. The deals made a mockery of Prime Minister Theresa May's plans to allow government to intervene in purchases in sectors that are important to Britain. On taking power she had said her government would be keeping a close eye on foreign takeovers. The Office for National Statistics said there was 227 inward M&A worth £187.4billion over the period - its highest annual value on record. Sanjay Thakkar, KPMG's UK head of deal advisory, added: 'Couple brimming war chests with low interest rates, a favourable debt market, a relatively benign economic climate and a desire amongst corporates to disrupt, and it's no coincidence that we have seen a plethora of bids - some successful, some otherwise - hit the headlines since the turn of the year... We foresee this to be just the start, and that 2017 could well end up being a landmark year for deal-making.' DAILY MAIL

Private rents set to rise by 20% in five years: Poorer households being pushed out of the market, warn experts
People on low incomes and housing benefits are being pushed out of the UK's private rental market as rents soar, a survey by the Royal Institution of Chartered Surveyors revealed. A third of respondents to RICS' latest survey said access to private rented properties had fallen among those on housing benefits. Sean Tompkins, chief executive of RICS, said: 'In the current climate, it can be hard enough for young professionals to make ends meet. But for those on benefits, the pressures may be insurmountable... However, if Government were to put in place additional support measures through the introduction of help to rent schemes, the door to the rental market may once again be opened for Britain’s most vulnerable.' Over half of private landlords surveyed said they would be prepared to take on homeless people or those on housing benefits if the Government launched a state-endorsed deposit and rent guarantor scheme. The survey also found that shortages of available properties to rent are mounting, with tenant demand having outweighed the number of new properties coming onto the market for over three years. In England, private rental prices grew by 2.3 per cent, Wales saw growth of 0.4 per cent while Scotland saw growth of 0.1 per cent in the last year. London private rental prices grew by 2.1 per cent in the year to January, which is 0.1 percentage points below the national growth rate over the period. Between January 2011 and January 2017, private rental prices in the UK increased by 14.3 per cent, strongly driven by the growth in private rental prices within London. DAILY MAIL

Median price paid for a home leapt 259% between 1997 and 2016 while earnings rose only 68%
Rising house prices now stand at an average 7.6 times the average annual salary, more than double the figure for 20 years ago, according to official figures. However, the new headline figure disguises dramatic regional variations. In the affluent London borough of Kensington and Chelsea, house prices are typically 38.5 times greater than annual earnings, but, 330 miles to the north-west, prices in Copeland, Cumbria, which includes the port of Whitehaven, are typically 2.8 times the average salary. The new figures for housing affordability in England and Wales between 1997 and 2016 have been issued by the Office for National Statistics. The ONS said housing affordability “has worsened in all local authority districts”. In 1997, house prices were on average about 3.6 times workers’ annual gross full-time earnings. Of the 10 least affordable local authorities, seven were in London. For example, in 1999, an employee in the borough of Camden could expect to pay 7.7 times their annual salary on buying a property, whereas in 2016 this had leapt to an average 19.6 times their annual earnings. Other areas saw much smaller increases over the same period. In Hyndburn in Lancashire, the equivalent figure has risen from 2.6 times to 4.1 times earnings. GUARDIAN

Amazon, Uber, Deliveroo: Gig economy companies trying to have their cake and eat it, say workers
Companies operating in the gig economy are “having their cake and eating it” by treating workers like staff while avoiding the tax and regulations on employing people on full-time contracts, according to a study. The survey by the Chartered Institute of Personnel and Development, the trade body for human resources staff, found that although workers are classified as self-employed, many were concerned about the level of control exerted over them by the businesses they worked for. “This is supported by the data, as just four in 10 gig economy workers, or 38%, say that they feel like their own boss, which raises the question of whether some are entitled to more employment rights,” the report said. The gig economy has become a focus of concern following the commercial success of companies such as Amazon, the ride hailing firm Uber and the delivery service Deliveroo. These companies employ workers on short-term contracts that can last just a few hours, allowing them to avoid paying employers national insurance, sickness and holiday pay. The CIPD found that most people it classified as gig economy workers were permanent employees, students or unemployed people taking jobs to top up their incomes and accepting hourly pay rates averaging between £6 and £7.70 an hour. The CIPD said its survey of more than 5,000 people found that 4% of the working-age population, or 1.3 million people, operated in the gig economy, lower than the 5 million estimated in some studies, though these include people on zero-hours contracts, eBay traders and people who rent out their homes through online apps lsuch as Airbnb. The report, To Gig or Not To Gig: Stories from the modern economy, also found that only 14% of respondents said they did gig work because they could not find alternative employment. The most common reason for taking on gig work was to boost income, which accounted for 32% of responses. GUARDIAN

Audi and VW sites raided in emissions probe
German prosecutors have raided Audi and VW sites as part of a probe into the manipulation of US emissions tests. Officers searched the Audi factory in Ingolstadt in Bavaria, and eight other locations, including parent company Volkswagen's headquarters in Wolfsburg. The searches were carried out in order to identify those involved in installing the devices that cheated the diesel tests, Munich prosecutors said. Audi-owner VW has already agreed to settlements of $21bn (£17bn) in the US. The raid at Audi's sites coincided with the company's annual press conference, in which it reported pre-tax profits of 3bn euros (£2.6bn) for 2016, a 37% drop on the previous year. The firm also announced a new autonomous vehicles division. In September 2015, Audi admitted that more than two million of its cars were fitted with software that allowed for the manipulation of test. Prosecutors from three German states said the raids were in connection to some 80,000 V6 3.0-litre diesel cars sold in the US between 2009 and 2015, whose buyers were unaware of the emissions scandal. They added that the search warrants were carried out particular to "clarify which people were involved in applying the [manipulation] technology and in providing false information to third parties". BBC NEWS

Saturday, 11 March 2017

Saturday, March 11, 2017 Posted by Hari No comments Labels: , , , , , , , ,
Fee and Chris wonder whether a female PM's chancellor will do better...

SOURCE GUARDIAN: Women bearing 86% of austerity burden, Commons figures reveal
Labour has urged the Conservatives to carry out a gender audit of its tax and spending policies, as the shadow equalities minister, Sarah Champion, published analysis showing that 86% of the burden of austerity since 2010 has fallen on women. Champion said research carried out by the House of Commons library revealed that women were paying a “disproportionate” price for balancing the government’s books. The analysis is based on tax and benefit changes since 2010, with the losses apportioned to whichever individual within a household receives the payments. In total, the analysis estimates that the cuts will have cost women a total of £79bn since 2010, against £13bn for men. It shows that, by 2020, men will have borne just 14% of the total burden of welfare cuts, compared with 86% for women. Many of the cuts announced in earlier years by former chancellor George Osborne, including a four-year freeze on many in-work benefits and reductions in the universal credit, are yet to bite. Hammond has loosened Osborne’s fiscal rules, but he will press ahead with most of the pre-planned austerity measures – though the tax credits rebellion forced the government to promise not to look for fresh savings from the welfare bill in future years. Mary-Ann Stephenson, co-director of the Women’s Budget Group lobby group, condemned the Tories in light of the new research. She said: “The chancellor’s decision to continue with the decisions of his predecessor to cut social security for these low income families, at the same time as cutting taxes, is effectively a transfer from the purses of poorer women into the wallets of richer men.” The government publishes an analysis of the differential impact of its policies at different points on the income scale, but does not carry out a gender analysis.


Why does everyone say inequality is falling, when it's rising? Because they're only counting incomes, not all wealth (property, pensions, etc.)

The NHS is not a “cost”. It creates nationwide jobs, technology, growth and wealth. Oh, and health

FTSE bosses take 2.5 days to earn what you earn all year. Data shows they don't deserve it

All governments agree to fix the housing crisis. Latest figures show we're still not even trying

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Thursday, 2 March 2017

Thursday, March 02, 2017 Posted by Hari No comments Labels:
Schools in England 'to see first real-terms funding cuts in 20 years'
Spending per pupil is to fall 6.5% by 2019-20, according to the Institute for Fiscal Studies (IFS), although it added that school funding had been well protected over the past two decades. Sixth-formers have been facing a continuing squeeze on budgets, with spending per further education (FE) student falling by 6.7% between 2010-11 and 2015-16 and a further drop of 6.5% expected over the next few years. It means that funding for 16- to 18-year-olds is no higher than it was almost 30 years ago. The IFS study examines education spending for different age groups – from early years to universities – over a number of years. It found that the biggest spending increases over the past 20 years have been on schoolchildren in England, with £4,900 currently spent on each primary school pupil and £6,300 spent per secondary student. In both cases, this is around double, in real terms, the amount spent in the mid-1990s. But the report shows that school spending is now falling and will drop by 6.5% over the course of this parliament. Regarding older children, the IFS report warns that 16-18 education has been “the biggest loser from education spending changes over the last 25 years”, adding: “It experienced larger cuts in the 1990s than other sectors, smaller increases during the 2000s and is currently experiencing the largest cuts. This long-term squeeze in resources is a major challenge for the sector as a whole.” Further education spending per student was 45% higher than secondary school spending in 1990, but will be around 10% lower in 2019-20. Luke Sibieta, one of the report authors and an IFS associate director, said: “Over the next few years, both further education and schools are due to experience cuts... For FE, this comes on the back of tight funding settlements for decades that will leave spending per student the same in 2020 as it was in 1990. The lack of priority given to FE by successive governments in spending settlements does not seem sustainable.” GUARDIAN

Typical household incomes in the UK will not grow for the next two years
In five years' time, median income will be 4% higher than it is now, the Institute for Fiscal Studies (IFS) predicts. This is due to the "long shadow" of the financial crisis. The recession and tepid recovery mean that from the start of the crisis to 2021, households will suffer the worst income squeeze for 60 years, it says. They will be £5,000 a year worse off than they might have expected. Tom Waters, an author of the report, said: "Even if earnings do much better than expected over the next few years, the long shadow cast by the financial crisis will not have receded." This was generally the result of small increases in wages, low productivity levels, tax and benefit policies and the state of the UK economy. The squeeze would be felt worst by low-income households with children, he said, owing primarily to the four-year freeze in working-age benefits. In contrast, pensioners would see their income growing faster than working-age households - a reversal of the position a decade ago. "Once you account for their lower housing costs and smaller household size, median income is projected to be nearly 8% higher for pensioners than for non-pensioners by 2021-22, having been nearly 10% lower in 2007-08," the report said. Campbell Robb, chief executive of the Joseph Rowntree Foundation, said: "These troubling forecasts show millions of families across the country are teetering on a precipice, with 400,000 pensioners and over one million more children likely to fall into poverty." He added: "It is essential that the prime minister and chancellor use the upcoming Budget to put in place measures to stop this happening. An excellent start would be to ensure families can keep more of their earnings under the Universal Credit." BBC NEWS

State pension age 'could rise above lifespan' in poorer areas, says MPs committee
The Work and Pensions Committee said the state pension age would need to rise above 70 by 2060 to make the current policy of increasing the pension amount sustainable. Currently, the state pension age is set to be 67 for both men and women by 2028. The committee said male life expectancy was below 70.5 in 162 areas in Scotland, and in 26 areas in England. By contrast, male life expectancy in the area of Westminster, which includes Mayfair and Covent Garden, was 92.9 years. State pensions rise each year by the inflation rate or whichever is highest of average earnings or 2.5% - as part of the so-called pensions triple-lock. The government said it was committed to the policy until 2020 at least. As a result of triple-lock policy, the state pension has risen by £1,100 since 2010. Back in November the committee said the policy should be scrapped. Frank Field, committee chairman, said: "With the triple-lock in place, the only way state pension expenditure can be made sustainable is to keep raising the state pension age. This has the effect of excluding ever more people from the state pension altogether. Such people will disproportionately be from more deprived areas and manual occupations, while those benefitting most will be the relatively prosperous." He said that the state pension will be at a level by 2020 where it will provide a "decent minimum income" for the older generation and the triple-lock "will have done its job and it will be time therefore to retire it". Instead of the triple-lock, the committee said the new state pension and basic state pension could be linked simply to average earnings - which the Institute for Fiscal Studies estimates would save 0.8% of GDP (Gross Domestic Product) a year. That would be a real terms reduction of £15bn at today's prices, the equivalent to 4p on the basic rate of income tax, it said. Historically, pensions were linked to inflation rather than earnings, which reduced pensioner incomes relative to those of the working population. BBC NEWS

'Rigged' system means 83% of working families living in rented homes cannot afford to buy a new-build property
Housing charity Shelter found that 83 per cent would not be eligible to buy such a property, even if they used the Help to Buy equity loan scheme, which only requires a deposit of 5 per cent. The charity's research identified the West Midlands as the least affordable region, with 93 per cent of privately renting families struggling to afford to buy an average new home in the area, which costs £206,950. It also found just over half - at 51 per cent - of new homeowners had experienced problems with their properties including issues with construction, unfinished fittings and faults with utilities. Shelter went on to claim that the current housbuilding system was 'rigged' and needed to be replaced. It said the current 'speculative' way that housebuilding worked resulted in a conflict of interests and a highly combative local planning process, with landowners wanting to maximise their windfall up-front, finance providers wanting to minimise risk and the local community wanting to minimise the impact. It called for the current approach to be replaced with a 'new civic housebuilding' system that supports the building of new, affordable high quality homes, with greater powers for local authorities over land in their area. Under the new scheme, land would be sold to the development group with the proposal that most closely met the needs of the community, rather than selling to the highest bidder alone. Shelter said that lower land prices would mean developers did not need to keep house prices 'artificially high' to turn a profit. Under Shelter's proposed initiative, landowners could choose to sell at reasonable prices, or to invest their land as equity and own shares in a development, taking long-term returns and a share of the profit. Shelter said civic housebuilding that met the needs of communities was used to deliver the Georgian 'new towns' of Edinburgh and Bath, the Edwardian garden cities and the post-war new towns. DAILY MAIL

Sir Philip Green's reputation 'still stained' despite BHS pension deal
Retail tycoon Sir Philip Green's £363m payment into the BHS pension scheme does not wipe away the stains from his reputation, a senior MP has said. Business committee chairman Iain Wright told the BBC that the payment does not necessarily safeguard his knighthood. Sir Philip agreed the settlement with the regulator to help fill the failed retailer's pensions black hole. Under the deal with the Pensions Regulator announced on Tuesday, former BHS workers will get the same starting pension that they were originally promised. But the protection against inflation is not as strong. The new scheme offered benefits of around 88% of the value of their full BHS scheme. Sir Philip's contribution is significantly less than the £571m pensions deficit BHS was left with. Sir Philip owned BHS for 15 years before selling it for £1 to former bankrupt Dominic Chappell. Mr Wright welcomed the pensions deal, saying  that Sir Philip had a moral duty to right some of the wrongs committed under his watch. "It sends out a very powerful message. You might try to sell a business. You might try to flog it off on the cheap because you don't want to deal with the pension deficit, but the pension regulator said we'll come after you and we'll make you pay big money in order to safeguard the interests of pensioners and that can only be a good thing," the MP said. He said Sir Philip's knighthood was a separate issue and nothing had changed in his opinion since the House of Commons unanimously backed a non-binding motion to strip Sir Philip of his title last October. BBC NEWS

Bovis to pay £7m to compensate customers for poorly built homes
Bovis Homes is to pay £7m to repair poorly built new homes sold to customers, raising fresh questions about the standards of new-build properties across the country and the regulation of the market. The company – one of the biggest housebuilders builders in Britain – will pay compensation after angry customers formed a Facebook group accusing Bovis of pressuring them to move in to incomplete houses so it could hit sales targets. The boss of Bovis apologised to customers on Monday for the poor quality of their houses and promised to finish them “to their satisfaction”. He refused to state how many homes needed the urgent repair work, or how much it will cost to fix each house. The company also refused to say which developments were worst affected, but it is understood that many of the problem homes are in Kent. The announcement led to more than £100m being wiped off the stock market value of Bovis, with its shares falling 10% to 757p. The news comes amid growing complaints about the quality of new homes and the organisation that sets the standards for new-build properties. Critics claim NHBC , which provides 10-year warranties for most new homes in Britain, is failing to protect consumers. Another recent controversy over new homes has seen Britain’s largest housing association, Clarion Housing Group, agree to buy back some properties on a housing development in the east London borough of Havering. Oliver Colvile, the Conservative MP who chairs an all-party parliamentary group on new builds, called for an independent ombudsman to hold housebuilders to account. He said: “There is a genuine need for more housing but we need to ensure they are going to be good quality housing rather than the sometimes frankly rubbish.” The affected customers have been left nursing problems such as faulty plumbing, no guttering, and half-finished tiling. Rob Elmes said he was offered £3,000 if he and his wife completed on 23 December, but declined the offer because of the defects with their £320,000 three-bedroom property in Inkberrow, Worcestershire. Helen Batt said her £389,995 Bovis home in Maidstone, Kent, had no turf in the back garden, the wrong kitchen units and had not been carpeted. Bovis built almost 4,000 homes last year, but said 180 properties that should have been completed in 2016 had yet to be handed over to buyers. GUARDIAN

Overdraft charges are elephant in the room, say MPs
Bank overdrafts were the major source of high-cost borrowing for millions of people, the All Party Parliamentary Group on Alternative Lending concluded. The costs can exceed those of payday loans, it said in a report. However, further price caps - as seen in the payday sector - may not be appropriate, the MPs said. Banks made £1.2bn in unauthorised charges each year, the committee heard during evidence, paid by those who were least able to bear the cost. The committee said there were concerns over the transparency of charges and how easy it was to compare between different banks. The model of "free banking", whereby banks clawed back costs through overdraft charges, required "government or regulatory attention", it said. In its report on bank accounts published in August, the Competition and Markets Authority decided against a cap on charges. However, the Financial Conduct Authority has now announced that it will examine the issue in detail itself. In its report, the parliamentary group said that regulators should concentrate on competition and conduct. BBC NEWS

Saturday, 25 February 2017

Saturday, February 25, 2017 Posted by Hari 1 comment Labels: , , , , , , ,
Inequality has reduced!

No it hasn’t.

Yes it has! I heard Dimbleby say it on Question Time. And the Lefties all nodded solemnly.

“...the statistics show the gap is narrowing” David Dimbleby 2nd February 2017

That’s because they‘re all clueless.


They don’t realise they’re only talking about income inequality, not wealth inequality.

What’s that?

Wealth inequality measures all your assets – property, shares, pension pot, that sort of thing.

You mean the really big numbers.

Right. Income is just what’s going into your bank account – pay, dividends, pension payouts, and the rest. Net Income – what they’re referring to when they talk about income inequality - is all that after benefits and taxes have been added and subtracted.

Let me guess. Wealth inequality has risen?

You win a free Question Time T-shirt and nodding duck pencil sharpener. Generally, asset prices have continued to recover since the bank crash, but the poor hardly have any assets!

So the gap between rich and poor continues to rise.


And what of the gap between Dimbleby’s ears, and the ears of every card carrying leftie who hasn’t bothered to use this shocking fact that would make every working hour of their lives so much easier?

Hmm. No official data on that one. Looks like the Office for National Statistics needs to tear itself a whole new index.

The background data

Wealth inequality is almost twice that of income inequality. The overall Gini coefficient (the official measure of inequality, where 0=minimum and 1=maximum) for net income is 0.34, while that for total wealth is 0.64.
HRP = age of household reference person

Wealth in Great Britain is even more unequally divided than income. The richest 10% of households hold 45% of all wealth. The poorest 50%, by contrast, own just 8.7%.

Wealth inequality is rising. The ONS report says: “In July 2012 to June 2014, the wealthiest 20% of households had 117 times more aggregate total wealth than the least wealthy 20% of households. In comparison, the wealthiest 20% of households had 97 times more aggregate total wealth than the least wealthy 20% of households in July 2010 to June 2012.”

It goes on the explain: “Figure 2.10 shows the median household total wealth by the levels of household net equivalised income. Households in the lowest band of income had the lowest median household total wealth, while those households in the highest income band had the highest. During July 2012 to June 2014, households in the lowest income band had a median household total wealth of £34,000 while for the highest income group that was over 26 times as big, £225,100. Between the 2 survey periods shown, the median value for those in the lowest 3 income bands fell, whilst the median value of household total wealth increased across all other income bands. The median value of household total wealth fell the most in the lowest income decile, with a 38% fall seen between July 2010 to June 2012 and July 2012 to June 2014, and the largest increase was seen in the top 2 income deciles, with a 19% increase in the median value seen over the same period.”

The South East’s median household total wealth (£342,400) is over twice that of the North East (£150,000). It's another sign of the growing divide between the south and the rest.
Office for National Statistics: Total wealth, Wealth in Great Britain, 2012 to 2014 (Chapter 2)

The poorer regions have got poorer. Yorkshire and The Humber saw a fall in median household total wealth of 8% between July 2010 to June 2012 and July 2012 to June 2014. Smaller falls were also seen in the West Midlands (2%) and East Midlands (1%).

Even income inequality is on an upward trend, when you include housing costs: essential costs like rent or mortgage interest, water charges, insurance premiums, and service charges. This is important as such costs can hardly be avoided. The Resolution Foundation report says “Looking at the 90/10 ratio, income inequality before housing costs peaked in 1991 and has been largely flat or falling since then. But after housing costs, this ratio was higher in 2014-15 than at any point in the 1980s or 1990s.”

Resolution Foundation: Living Standards 2017

Thursday, 16 February 2017

Thursday, February 16, 2017 Posted by Hari No comments Labels:
Tesco's rip-off at the tills: Offers on shelves are out of date, but customers aren't told - so pay more
Tesco has been “accidentally” routinely overcharging shoppers at the tills, according to a damning investigation. Most customers do not usually bother to go through their receipt after a shopping trip, assuming supermarket technology will not get prices wrong. But it appears that about two thirds of Tesco’s outlets have not been updating the shelf prices for items regularly enough. And the vast majority of the errors involved overcharging rather than undercharging, the investigation found. The problem involved multi-buy deals that remained advertised on the shelves long after they had ended. Consequently people who were tempted by an offer may have ended up paying full price. For example, packs of Christmas gingerbread were listed at £1.75 each or two for £3, but the saving was not given at the till. Another ‘deal’ involving burgers and bottles of guacamole sauce saw a shopper pay 60 per cent more than the shelf price – an extra £3.30. One store offered two Viennetta ice cream packs for £2, however the till rang up the normal full price of £1.37 each. The findings will raise suspicion that the same thing is happening in other supermarkets and across the high street. A survey of 50 Tesco stores in the West Midlands, Liverpool and Leeds, over a three month period found 33 were regularly short changing customers on offers. When challenged over the discrepancy, Tesco staff honoured the shelf price offer, however trading standards say that was not good enough. Martin Fisher, from the Chartered Trading Standards Institute, said: ‘If customer A has come back and complained and been refunded that doesn’t mean there weren’t 20 other customers who didn’t spot it and didn’t complain.’ One member of staff captured on film said there were not enough people to remove offer labels that are out of date. She said: ‘It’s called short staffed. They’ve cut the department in half.’ In some cases, staff failed to remove out-of-date labels from the shelves even after being warned that the offer prices were wrong. At a Tesco Express in Birmingham, one out-of-date offer price was still on display a month after the error was first pointed out. DAILY MAIL

Businesses are using self-employment laws to avoid tax
The head of Theresa May's inquiry into the way millions of people work has said there is evidence businesses are using self-employment laws to avoid tax. "There is no question - and Phillip Hammond said this in the Autumn Statement - that when self-employment rose that reduces the tax take to the Exchequer," said Matthew Taylor, who is head of the Royal Society for the Encouragement of Arts, Manufactures and Commerce. Some were deliberately using so-called gig workers to avoid paying contributions to the Treasury, he said. His comments come on the day a report by the Trades Union Congress says the tax hit from the growth of "insecure work" could be as high as £4bn ($5bn) a year. The TUC said that represented nearly a quarter of the social care budget spent in England. Research from the Institute for Fiscal Studies revealed last week that a permanently employed person pays an effective rate of tax of 31% on their income. That falls to 22% for self-employed people, who pay lower levels of national insurance. Businesses also save as they make no national insurance contributions and can avoid maternity and holiday pay entitlements. Because self-employed people tend to be on lower incomes they also receive higher levels of benefits, another cost to the Treasury. BBC NEWS

Nursing degree applications slump after NHS bursaries abolished
Applications by students in England to nursing and midwifery courses at British universities have fallen by 23% after the government abolished NHS bursaries, figures show. Nursing leaders said the sudden slump revealed by the latest university application data was inevitable given that student nurses now faced paying annual tuition fees of more than £9,000. “These figures confirm our worst fears. The nursing workforce is in crisis and if fewer nurses graduate in 2020 it will exacerbate what is already an unsustainable situation,” said Janet Davies, the general secretary of the Royal College of Nursing. “The outlook is bleak: fewer EU nurses are coming to work in the UK following the Brexit vote, and by 2020 nearly half the workforce will be eligible for retirement. With 24,000 nursing vacancies in the UK, the government needs to take immediate action to encourage more applicants by reinstating student funding and investing in student education. The future of nursing, and the NHS, is in jeopardy.” Universities dismissed talk of a crisis, arguing that undergraduate numbers across other courses fell in 2012 when tuition fees rose to £9,000 a year but later recovered. GUARDIAN

Young men paid less than predecessors, says Resolution Foundation
By the age of 30, young men have earned £12,500 less on average compared to those born between 1966 and 1980, according to the Resolution Foundation. It suggested that men now were more likely to be working in basic service jobs, or part-time, with lower wages. Torsten Bell, executive director at the Foundation, said: "The long-held belief that each generation should do better than the last is under threat. Millennials - those born between 1981 and 2000 - are the first to earn less than their predecessors. "While that in part reflects their misfortune to come of age in the midst of a huge financial crisis, there are wider economic forces that have seen young men in particular slide back." Many found themselves working on reduced hours in shops, bars and restaurants, whereas their predecessors were more likely to have been employed in manufacturing. The proportion of low-paid work carried out by young men has increased by 45% between 1993 and 2015-16, compared with a fall among young women, the report said. This has narrowed the gender pay gap, but for the wrong reasons, it said. "In one sense this is a story of female progress on a massive scale. Women are leaving low paid occupations in their thousands. As public policy has supported female employment, with better maternity and childcare policies, and cultural norms have shifted, more women are finding work that pays a good wage," said report author Daniel Tomlinson. "But, on the flip side, the fact that the UK has a large low-paid service sector economy is something that increasing numbers of young men will now be able to testify to. It's good news that low-paid roles are now more evenly shared between men and women but the way in which this is happening raises serious concerns about what the world of work has to offer some young men... Young women are seeing a lack of generational pay progress and they are only catching-up with their male counterparts because of a deterioration in outcomes for young men.” BBC NEWS

UK tax burden will rise to highest level for 30 years, IFS warns
The amount of tax paid in the UK is poised to reach the highest level in 30 years and will rise even further because of mounting debt and pressure on public services, economic forecasters have said. The Institute for Fiscal Studies said that next year more than 37 per cent of Britain's national income will be drawn from tax receipts for the first time since 1986. It said that Philip Hammond, the Chancellor, will have to extend public spending cuts into the 2020s and introduce even higher taxes to tackle a £34billion black hole in his Budget. Britain's national debt has now hit its highest level since 1975, the Institute for Fiscal Studies said, leaving the Government more dependent on taxpayers to balance the books. Households and companies have been hit by an array of tax rises over the past decade including rises in VAT, increases in insurance premium tax and higher levels of stamp duty. Theresa May's Government has increased the "tax burden" further with further increases in insurance premium tax and an apprenticeship levy on big businesses. Hundreds of thousands of people have also been dragged into paying the higher rate of tax because the threshold at which it is paid has failed to keep pace with rising inflation. The Institute for Fiscal Studies said that spending on social care dropped by over 6 per cent despite a 16 per cent increase in the population of over 65s in the UK. The report warned spending on adult social care "seems likely to continue falling", largely due to the increased pressure of an elderly population and overstretched health budgets. Spending on law and order and schools has also fallen significantly over the last few years. The report said that higher rates of inflation by the end of 2017 will push down household spending, increasing the Government's need to either increase taxes or cut spending. The Government has already announced for £17billion of tax rises over this Parliament, and the IFS believes that Mr Hammond will have to find an extra £34 billion unless he ditches his target of eliminating the state deficit before 2025. Compared with 1986, the last time the Government was so reliant on tax income to balance its books, companies pay significantly less tax but the amount of VAT has increased significantly. Health spending is rising at the slowest rate for a decade, the IFS said, as it warned the Government is not putting enough money into the NHS to cover the growth and increasing age of the UK's population in the years to come. TELEGRAPH

Government begins plans to sell off billions of pounds worth of student debt to private companies
Graduates who took out loans before the 2012 academic year could find themselves making repayments to private lenders buying up contracts from the Student Loans Company (SLC) – a move the Treasury expects to make £12bn from in return. Universities Minister Jo Johnson said there would be no impact on graduates with loans, but union leaders have attacked the decision - with the National Union of Students (NUS) accusing the Government of pulling an “ugly move” on students. Sorana Vieru, NUS Vice President of Higher Education, said: “Selling the loan book to investors is privatisation through the back door. It is outrageous that bankers will profit off the backs of graduates who took out loans because they had no other option.” First to be sold will be the 2002/06 student loan book, which had a face value of £4bn the end of the 2014/15 financial year. Former City lawyer and Advisory Board member for the Intergenerational Foundation think-tank, Estelle Clarke, said "The loans in question already charge expensive monthly compounding interest and purchasers may well seek to receive more money from borrowers.” While the Government insists there will be no changes made to the terms and conditions of loans undertaken, Ms Clarke warned: "The government has a track record of breaking its promises; its ‘press’ position cannot be relied upon”. INDEPENDENT

Hundreds of companies failing to pay minimum wage
The government has named 360 businesses which have failed to pay either the National Minimum Wage (NMW) or the National Living Wage (NLW). Among them are well-known names like Debenhams, Subway, Lloyds Pharmacy and St Mirren Football Club. More than 15,500 workers had to be paid back nearly one million pounds. But that may represent just the tip of the iceberg: The Office for National Statistics has calculated that 362,000 jobs did not pay the NMW in April 2016. The biggest offenders were employers in hairdressing, hospitality and retail. One worker at a dental practice in London's Harley Street was refunded nearly £12,000. Excuses used by businesses for not paying the full basic wage included using tips to top up their pay, making reductions to pay for a Christmas party, or making staff pay for their own uniforms. For the first time the list includes firms which failed to pay the National Living Wage, which was introduced on 1 April 2016 for workers over the age of 25. The current rate is £7.20 an hour. Those under 25 receive the NMW, currently £6.95 for 21 to 24 year-olds, and £5.55 for 18 to 20 year-olds. In total the 360 businesses that broke the law were fined £800,000. However the TUC said that was not a big enough deterrent. It called for higher fines, and more prosecutions. "This should be a wake-up call for employers who value their reputation. If you cheat your staff out of the minimum wage you will be named and shamed," said the TUC's general secretary, Frances O'Grady. "But we also need to see prosecutions and higher fines for the most serious offenders, especially those who deliberately flout the law." The ONS has said that 1.3% of employees are not being paid the minimum, amounting to 178,000 full-time workers, and 184,000 part-time workers. But the TUC believes that even that number is an under-estimate, as it does not take into account those working in internships, or those who may be wrongly classified as self-employed. BBC NEWS

Minister denies 'sweetheart' tax deal with Surrey
In January Surrey Council announced a local referendum on whether to raise council tax by 15% to cover what it said were shortfalls in funding to cover the rising costs of social care. Labour leader Jeremy Corbyn later claimed leaked text messages showed ministers were prepared to offer a "sweetheart deal" to Surrey council to avoid the embarrassing referendum. But Mr Javid insisted there was "no memorandum of understanding" between the government and the council. And Surrey County Council said "no deal" had been offered. But plans for their referendum - which are triggered if a local authority proposes a council tax rise of 5% or more - were dropped during a full council meeting on Tuesday. Mr Corbyn asked the prime minister: "So how much did the government offer Surrey to kill this off and is the same sweetheart deal on offer to every council facing the social care crisis created by this government?" Liverpool Mayor Joe Anderson said he was "seeking urgent clarification" about whether Surrey had been "bought off" by the government, adding that cities such as Liverpool, Manchester, Newcastle and Birmingham had been hit "far harder" by funding cuts. BBC NEWS
Thursday, February 16, 2017 Posted by Hari No comments Labels: , , , , ,
Fee and KJ identify our last remaining hope for social mobility...

SOURCE GUARDIAN: Grammar schools ask parents for donations to cover funding cuts
The government’s plans for a revised “fair funding” formula would mean most grammar schools were worse off as a result of the changes proposed by the education secretary, Justine Greening – at a time when the government is banking on grammar school expansion as a key domestic policy aim. The Grammar School Heads’ Association said more than 100 of the existing 163 grammar schools in England would be worse off as a result of the proposals, with more than 60 suffering deep cuts in annual budgets. The new “fair funding” formula unveiled by Greening at the end of last year would impose cuts on schools in mainly urban and suburban areas, and redistribute funding to more rural regions that have received considerably lower per pupil funding for many years. However, the policy failed to inject any new funds into the school system, meaning that thousands of schools in England with frozen budgets will be further disadvantaged. Grammar schools, which select by academic ability at the age of 11, are worse off than many state schools because of their failure to admit disadvantaged pupils eligible for additional government funding of more than £900 each a year. Altrincham Grammar School for Boys has just 26 students receiving pupil premium funding out of 1,250 students enrolled, or just 2% overall. Schools in England are not allowed to charge pupils for teaching, attending or applying to join a school. But they are allowed to approach parents for donations and to charge for additional activities such as trips. While some grammar schools already ask parents for regular donations, Tim Gartside, the headteacher of Altrincham Grammar School for Boys in Trafford, said his school was considering asking parents for donations of £30 to £40 a month if the new formula goes ahead. Parents of pupils at Latymer school, a grammar school in north London, were told last year that a “very significant financial shortfall” could force it to cut staff, increase class sizes and offer fewer subjects at GCSE and A-level. A letter from the school’s headteacher and governors asked for donations of £30 to £50 a month, and told parents such contributions were “considerably less than the average fees of an independent school”. Other grammar schools known to have asked parents for donations include Southend High School and Ilkley Grammar School.


Official stats show Free Schools are no better, but they are cheaper to "build" from ex-office space!

School class sizes in England are among the largest in the OECD

The NHS is not a “cost”. It creates nationwide jobs, technology, growth and wealth. Oh, and health

FTSE bosses take 2.5 days to earn what you earn all year. Data shows they don't deserve it

All governments agree to fix the housing crisis. Latest figures show we're still not even trying

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Thursday, 2 February 2017

Thursday, February 02, 2017 Posted by Hari No comments Labels:
Social Care funding crisis: Tory-led Surrey County Council announce referendum on 15 per cent council tax hike
A Tory-controlled council is set to hold a referendum on raising council tax by 15 per cent, after blaming the Government for the looming crisis facing social care. Surrey County Council said it had a "huge gap" in its budget following successive years of cuts to local government funding by ministers. The council, which includes the constituencies of both the Chancellor Philip Hammond and Health Secretary Jeremy Hunt, will need the approval of local voters to bring in the new council tax rate. Such a hike would increase average tax on a Band D property by almost £200, bringing the bill to about £1,500. The leader of the council told Theresa May to stop spending money on foreign aid and instead fund elderly care. Conservative David Hodge blamed the Government for the looming crisis facing social care, saying it has to put up taxes.   He urged the Government to stop spending 0.7 per cent of GDP on foreign aid. He said: "Government has cut our annual grant by £170 million since 2010 - leaving a huge gap in our budget. Demand for adult social care, learning disabilities and children's services is increasing every year. So I regret, despite us finding £450 million worth of savings from our annual budget, we have no choice but to propose this increase in council tax." Local authorities are required to hold a referendum if they want to increase council tax beyond a Whitehall-imposed threshold of 2 per cent. Surrey's proposed referendum would take place on May 4, alongside the local elections. Politicians have been given repeated warnings that the country is facing a looming care crisis, as rising numbers of nursing homes close down in the face of shortages in staff and funding. The Local Government Association (LGS) says councils across Britain will receive £2.2 billion less to run local services in 2017/18 than last year. TELEGRAPH

NHS spending per person will be cut next year, ministers confirm
Numbers released by ministers show NHS England will face a sharp reduction of 0.6 per cent in real terms of per head in the financial year 2018-19. The figures also fly in the face of the Government’s public insistence that it is investing more in the health service, with Jeremy Hunt and Theresa May repeating the mantra of an extra £10bn for the NHS. That claim was debunked by the cross-party Health Committee in the summer, whose chair, Tory MP Sarah Wollaston, said the number was both “incorrect” and “risks giving a false impression that the NHS is awash with cash”. In a written statement to the House of Commons health minister Philip Dunne said NHS England’s per capita real terms budget would increase by 3.2 per cent in 2016-17 financial year. However growth would fall sharply next year, down to just a 0.9 per cent increase in 2017. It would then go negative by 2018-19 with a 0.6 per cent fall in real spending per head in that financial year. Growth would remain very low in 2019-20 at 0.2 per cent and 0.9 per cent in the years following. The wider health budget outside the NHS is facing even more sustained cuts, with two years of shrinking resource per head and a maximum growth rate of 0.4 per cent after this year. This includes staff training and public health. NHS trusts are reporting record deficits across the country as funding continues to tighten and fails to keep up with demand or inflation. This week the National Audit Office warned that overstretched A&Es were also having a knock-on effect on other parts of the health service such as ambulances, which they said were increasingly missing targets. The latest numbers of a per capita real terms cut relate only to England, because the health service is devolved to the Welsh, Scottish and Northern Irish governments – with Westminster’s controlling England’s system. INDEPENDENT

Your new job stinks, George! Worrying questions over links between Treasury and US finance giant that’s hired Osborne on huge salary
George Osborne was engulfed in a furious row last night over his lucrative new job with one of the world’s biggest investment firms. It emerged that Mr Osborne had met with executives from BlackRock, the world’s biggest asset manager, a total of five times in his final two years as chancellor. Before that, only junior ministers had met with the firm since 2010. His final meeting with the investment management giant came just days before he was sacked by Theresa May in July last year. The former Chancellor has since been handed a part-time role as a senior advisor at BlackRock, which is expected to earn him a six-figure salary. Last night, the Whitehall appointments watchdog was facing questions over why it had waved through Mr Osborne’s appointment without any objections. The so-called Acoba committee wrote to the ex-Chancellor saying it had ‘no concerns’ about him taking the post because he had made no policy decisions relating the bank’s interests. But in another twist yesterday, it emerged that the committee had since been forced to correct the letter - to admit that Mr Osborne did make decisions affecting the asset-management industry. Media reports from two years ago showed how BlackRock had gleefully greeted the ex-Chancellor’s landmark pension reforms, which gave savers control over their pension pots. At the time, the bank said that it was ‘uniquely positioned’ to take advantage. Last night, opposition MPs accused Mr Osborne of ‘trading on his ministerial contacts book’. They described Acoba’s handling of the appointment as an ‘embarassing bungle’ and a ‘farce’. The ex-Chancellor said that he was taking the one-day-a-week role with the firm, which he will take up on top of being an MP, netting him at least £200,000 a year. On top of his MPs’ salary he has earned at least £628,000 from after-dinner speeches following his sacking last July. The Mail revealed last year that two thirds of ministers and officials who then go on to take private sector jobs do so in the same sector they were in charge of when in government. Around 10 per cent of MPs have a second job, earning an average of £46,000 a year of pounds on top of their £74,000 salary. DAILY MAIL

RBS puts aside further £3.1bn for US mortgages fine
The provision is for an expected penalty over the sale of financial products linked to risky mortgages before the 2008 financial crisis. RBS, which is 72% state-owned, has now put £6.7bn aside to cover litigation by the US Department of Justice (DoJ). It means the bank is set to report a loss for 2016, the ninth year in a row that RBS has lost money. Chief executive Ross McEwan has been trying to end RBS's legal wrangles so that the government can sell its stake in the bank, which was the result of a £45.5bn bailout during the financial crisis. RBS's potential US penalty could fall anywhere between $12bn and $20bn, experts say. Most of the big banks have faced litigation over claims they mis-sold toxic mortgage-backed bonds in the run-up to the financial crash. Credit Suisse and Deutsche Bank agreed to pay $5.3bn and $7.2bn to settle their respective mis-selling cases in January. The DoJ is suing Barclays for alleged mortgage securities fraud after the bank walked away from negotiations in December. BBC NEWS

Well-paid bosses should not get knighthoods – says Sir Philip Hampton
Sir Philip Hampton, who is chairman of pharmaceuticals group GlaxoSmithKline and was awarded his knighthood for public service, said businesspeople were rewarded with money, and that the honours system should be directed at those who do not benefit from big financial inducements. “The rewards for being in business should be primarily financial and other rewards and appreciations probably should be more directed at people who are not getting financial rewards,” he said. “I think to get both financial rewards and other recognition is a bit too easy.” He also said bonuses ended up paying out even if performance was indifferent, adding: “We should try have a move back to much less incentive pay and, if necessary to keep the level of rewards competitive, more basic pay.” Honours handed to company bosses have been in sharp focus in recent months. In October, MPs voted for Sir Philip Green to lose his knighthood after the collapse of department store of BHS – a symbolic move – while the bribery scandal at Rolls-Royce has sparked calls from Labour for the firm’s former chief executive Sir John Rose to lose his honour. Fred Goodwin, who ran RBS until its £45bn taxpayer bailout in 2008, was stripped of his knighthood in 2012. He was appearing before MPs on the Commons business, energy and industrial strategy select committee and was among a number of witnesses giving evidence on corporate governance. GUARDIAN

One in 10 nursery schools in England face closure within months
There are only 400 maintained nursery schools left in the country, offering high-quality early years education targeted at vulnerable children from difficult and deprived backgrounds. Research for an all-party parliamentary group has found that 45 of those believe they will be forced to close by July, and almost 67% say they will be unsustainable once transitional funding provided by the government to ease the crisis finishes at the end of this parliament. Nursery schools are widely acknowledged to be a “jewel in the crown” of England’s education system, offering high quality education for the youngest children and the best outcomes for those from challenging or deprived backgrounds – 97% are rated either good or outstanding by schools watchdog Ofsted. Campaigners fear, however, that many will be forced to close as local authorities look for savings to meet unprecedented budget cuts and the government’s new early years funding formula – which comes into force in April to support the 30-hour free childcare offer to working parents – reduces nursery school income further. Following an outcry from the sector, the government has found an additional £56m in transitional funding for the next three years to try to ease the crisis. It is also carrying out a consultation to try to find a longer-term solution to funding. But some nursery schools fear they will not survive that long and are worried about the long-term sustainability of the sector. GUARDIAN

Rolls-Royce lobbied ministers to weaken anti-bribery proposals
Rolls-Royce, which this week agreed to pay £671m in penalties after admitting it had engaged in corruption, lobbied ministers to weaken proposed curbs on bribery a decade ago. The effort to dilute anti-bribery regulations was conducted under the leadership of Sir John Rose, the firm’s chief executive until 2011, who is facing calls from Labour to be stripped of his knighthood after the bribery settlement. Documents from a 2004 court case show how Rolls-Royce, in alliance with other multinationals, exerted pressure on the government to water down proposals that were intended to combat bribery. Tony Blair’s government had proposed strengthening rules to stop bribery in contracts that were supported by the UK’s export credit agency and ministers said they were stepping up efforts to prevent UK businesses paying bribes to secure contracts overseas. The then Labour government subsequently diluted the anti-bribery proposals. That decision was challenged in a legal action brought by the anti-corruption campaign group Corner House. As a result, the lobbying documents were released. Sue Hawley, an anti-corruption campaigner involved in the legal action, said: “Clearly Rolls-Royce didn’t want any scrutiny of its agents and commission payments because its main business model was paying bribes via agents to win contracts.” In his judgment approving the Rolls-Royce settlement this week, Sir Brian Leveson described how the firm had systemically used middlemen to funnel “truly vast corrupt payments” to secure contracts. The bribes were paid to win contracts in countries including Indonesia, China, Russia, Thailand, Iraq and Angola, earning more than £250m in profits. GUARDIAN

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