Sunday, 26 June 2016

Sunday, June 26, 2016 Posted by Jake No comments Labels: , , , , , , , ,

Those still puzzling why Britons voted to leave the European Union (EU) in June 2016 should look to what's wrong in Britain and not to Europe. 

Naturally there will be many different individual reasons, but the dog whistles blown by both BREXIT (xenophobia) and BREMAIN (punishment) were not the decisive cause of the result.

Britons voted to protest that even if the European Project made Britain richer, if the riches the went to the few and they didn't get a share, then they didn't want to stay anymore. A protest that "the few" were surprisingly oblivious to.

Britons voted for BREXIT because of chronic Inequality and Inequity in Britain, not because of immigration. Data from the Electoral Commission shows that out of 382 regions, 263 had a majority for BREXIT. London, which has by far the highest proportion of immigrants, voted strongly for BREMAIN. 

For evidence, look to the data:

a) Office for National Statistics migration data shows the areas that voted for BREXIT in England have lower levels of immigration than those that voted for BREMAIN. London, which came out strongly to BREMAIN has the greatest percentage of non-British population:

b) On the other hand, the areas that voted from BREXIT are, apart from Northern Ireland, significantly poorer than those that voted for BREMAIN

c) Other ONS data shows the extraordinary degree London has taken the lion's share of the UK's economic success.

d) A report by Inequality Briefing showed for Northern Europe London is the richest region, but 9 out of the 10 poorest regions were also in the UK.

Jeremy Corbyn has to be admired for his insouciant "rope a dope" strategy to deal with Labour MPs calling for his resignation. MPs whose slithering up the greasy pole has resulted in it slipping their minds who they are supposed to be representing.

Inspite of all his opponents' trash talking Corbyn should be confident the crowds of ordinary party members are behind him. 
Perhaps Corbyn doesn't really want to be, or is not suited to be, Prime Minister. But for Labour to avoid returning to "Tory-Lite" mode, he needs to hold fast. Eventually it will dawn on an ambitious and capable Labour politician the path to Number 10 is to the left.

Corbynistas should take heart:
a) 24 hours after two Labour MPs tabled a vote of no confidence, a petition on 38 Degrees had more than 140,000 members of the public voting their Confidence in the man:

b) The EU referendum turnout was higher than any General Election since 1992. This was because a clear alternative was offered: In or Out. Something that hasn't happened since 1997 from when the electorate has been offered Tory-Lite (New Labour) or Tory-Tory (Tories).

Corbyn needs to offer a clear alternative, then the usual non-voters will come. 

Farage, Gove and Johnson may actually believe their "Once more unto the BREXIT" rhetoric caused Britons to head for the Exit. The real impetus came from decades of chronic inequality regardless of Labour or Tory governments:

Farage, Gove and Johnson may believe themselves cast in the Churchillian mould. But going in the same direction doesn't mean being led. The idea the economically disadvantaged were led by rightwing Tory luminaries Gove and Johnson is risible. BREXITEERs were punishing the political class, especially rightwing Tory luminaries.

Just because Britain voted to BREXIT didn't mean they believed what the BREXIT camp told them. Remember, a chap being followed closely by a bull is more likely to be being chased by it than to be leading it.


Friday, 24 June 2016

Friday, June 24, 2016 Posted by Hari 1 comment Labels: , , ,

Thursday, 16 June 2016

Thursday, June 16, 2016 Posted by Hari No comments Labels:
FTSE 100 giants with vast pension black holes hand billions to shareholders
Britain's blue chips are dishing out billions more in dividends to shareholders despite a crisis in their pension funds. Analysis by investment group AJ Bell shows that 54 companies in the FTSE 100 index have handed out £48billion to investors in the last two years – despite having a £52billion pension black hole. And 35 have been paying out more in dividends than the total size of their pension deficit. Oil giant Royal Dutch Shell, for example, last year handed £8billion to shareholders despite figures showing it had a £6.7billion funding gap in 2014. Drug company AstraZeneca had a £1.9billion deficit in 2014 but threw off £2.4billion of cash last year. Fellow pharmaceuticals firm GlaxoSmithKline handed out £3.9billion in 2015, despite a £1.7billion gap for the previous year. AJ Bell investment director Russ Mould said: ‘Insufficient contributions to the pension fund could leave the company with hefty liabilities which could drag on future performance and ultimately lead to staff receiving lower pensions if the business runs in to difficulties and enters administration.’ It came as official figures revealed pension funds have plummeted almost £25billion further into the red. It means the 5,945 large schemes watched by the Pension Protection Fund (PPF) had a combined deficit of £294.6billion at the end of May – £24.4billion higher than a month earlier. The Pensions Regulator has issued a similar warning in the past. Andrew Warwick-Thompson, executive director of regulatory policy, said: ‘It is important that employers treat their pension scheme fairly. 'We expect trustees to question employers’ dividend policies where debt recovery contributions are constrained.’ Experts have warned Britain faces a looming pension crisis. Huge deficits mean around 600 pension funds are certain to collapse in the next decade, according to the Pensions Institute at Cass Business School. It says another 400 are also at risk. These funds have combined deficits of around £45billion – a figure which could potentially overwhelm the PPF rescue fund, which acts as a backstop in cases of disaster. DAILY MAIL

Passion and drive come first: 70% of small businesses say degrees aren't important
A huge 69 per cent of the online small businesses looking to expand this year that were questioned in the eBay Employee Skills Index survey say it isn't particularly important to them that candidates have a university degree. Instead, they place more importance on skills such as a strong grasp of social media, computer coding, and marketing. Half of those surveyed said finding employees with a university degree was 'not at all important' to them - and one in four said the same about GCSEs. Instead, the results indicate that practical skills gained through hands-on experience, and proficiency with technology are valued more highly than academic accomplishments. More than half of SMEs said it was important that a prospective employee has digital skills, and 41 per cent looked for candidates who could code and build computer programmes. Meanwhile, a considerable 61 per cent of respondents said they favoured candidates who had a strong grasp of marketing and advertising, One in three of the small businesses surveyed said they were planning to hire this year. And while the sorts of skills they are looking for are generally thought of as being the preserve of younger people, 41 per cent of prospective employees said age was 'not at all important' to them - which makes sense, as there are 900,000 more 50-64 year-olds in work now than in 2010. DAILY MAIL

Rigging the Energy Market: Price comparison sites to be investigated by competition watchdog
The investigation will examine whether websites agreed not to compete with each other when consumers searched on Google for the best deals. The Competition and Markets Authority said: “The CMA is investigating a suspected breach of competition law by some price comparison websites that offer energy tariff comparisons in relation to paid online search advertising.” Ofgem said it found that two or more of the comparison sites had, since 2010, “been parties to an agreement or concerted practice relating to bidding and/or negative matching for search advertising which have as their object or effect the prevention, restriction or distortion of competition.” These practices included “agreements not to compete in relation to particular search terms used for the purposes of online search advertising”. Negative matching is when an advertiser indicates to a search engine operator such as Google that it does not want its website to appear in the search results for specific keywords. In a bizarre twist, the issue was handed to the CMA after an initial investigation by the industry regulator Ofgem was at risk of being compromised by actions of Ofgem staff. Ofgem found its staff had, before the formal investigation begun, been in contact with the websites now under investigation, encouraging them to change their behaviour when it came to buying advertising on search engines such as Google. Once the investigation began, Ofgem realised its earlier activities could call into question the regulator’s own impartiality. GUARDIAN

M&S criticised for ditching antisocial hours pay to offset wage rise
The retailer plans to increase basic pay for its 69,000 shop-floor workers by 15% from next April to £8.50 an hour but has offset the cost of doing so by cutting special pay rates. The changes, announced last month, will give a boost to the majority of staff but long-serving workers – who previously enjoyed premiums for working after 9pm and on Sundays and bank holidays – will lose out. Labour MP Siobhain McDonagh said some staff members would lose up to £2,000 a year as a result of the changes. “This is not just any pay cut. This is a big fat M&S pay cut,” she said. M&S said the planned pay rise would give its staff one of the highest hourly rates in UK retail alongside one of the best benefits packages. All staff affected by the change are to get a one-off compensation payment to ensure they are not financially affected for the first two years of the change. The government faces pressure to crack down on companies offsetting rises in basic pay by removing other benefits. In recent months, a string of firms, from fish factories in Grimsby to coffee shops in central London, have withdrawn overtime, Sunday pay, bonuses, free food and paid breaks in order to keep the wage bill down. Major retailers including Tesco, Morrisons and B&Q have faced protests over implementing cuts to benefits alongside increases in basic pay. David Cameron said he had not seen details of the pay changes at M&S but wanted to see the “national living wage”, a new minimum wage for over-25s, feed through into “higher take home pay, not lower take home pay … We would urge all companies to make sure that is the case,” he said. GUARDIAN

'Cash beats shares!' BBC journalist Paul Lewis challenges conventional investing wisdom in study covering 21 years
Saving in best buy cash accounts over the past two decades beat putting your money in a FTSE 100 tracker the majority of the time, according to research by BBC Money Box presenter Paul Lewis. The high profile financial journalist has carried out a huge study which challenges the conventional wisdom that investing in stocks is more rewarding than saving if you stick with it over the long term. Lewis compared returns from the top one-year deposit account each year since 1995 to the money made on a simple tracker fund cloning the performance of the top 100 shares listed on the London stock market. This 'active cash' beat the tracker in 57 per cent of 192 rolling five-year periods from 1 January 1995 onwards. And cash did even better over longer periods, beating the tracker fund 96 per cent of the time in the 84 rolling 14-year periods since 1995. Lewis also highlighted that the tracker fund lost money up to a third of the time over investment periods ranging from one to 11 years - whereas cash savings will always grow. The research took into account dividends reinvested in the tracker and any interest earned reinvested in cash savings, so gains from compounding were included in both cases. Over the whole period shares did win out but by a small margin that is small enough for savers to question whether the risk was worth it. Lewis says money invested in best buy cash over the whole 21-year period from 1 January 1995 to 1 January 2016 would have produced an average annual compound return of 5 per cent, while the tracker would have produced a compound annual return of 6 per cent. That 1 per cent difference is far lower than the 3-8 per cent typically quoted as the ‘risk premium’ of investing in shares rather than cash, explains Lewis. DAILY MAIL

Why IS Barclays letting pushy salesmen flog £100 diet pills in its branches? Controversial US health schemes set up stalls in banks and pounce on customers
Salesmen from controversial health schemes are setting up stalls in Barclays branches and pouncing on people waiting to be served. Customers are being flogged expensive face creams and diet pills — and asked to become part-time sales staff themselves. Most of the companies involved are U.S.-owned and notorious for pushy sales tactics. They have hijacked a Barclays community programme that was designed to give small local businesses a cost-free way of reaching High Street shoppers. Barclays set up its scheme allowing small businesses to operate pop-up stands in its branches in 2014. You can apply to a local branch to put up a stall and the bank makes no money from the arrangement. However, Money Mail has discovered that instead of helping local entrepreneurs, the spaces have been seized on by big overseas businesses. The revelation has sparked concern that elderly customers who depend on branches are at risk of being targeted. Witnesses say salesmen are telling elderly customers that the products, which include £100 diet pills, energy bars and £30 herb-infused face creams, can ease ailments such as arthritis. Stay-at-home mothers are being told they can make an 'easy' £300 a month if they sign up to become saleswomen. Yet most of those lured in will be unaware of the dubious health benefits of the products. And those recruited as agents can face enormous pressure to sell — and stinging costs if they fail to hit monthly targets. Forever Living, Arbonne and Herbalife all appear to be regular fixtures in Barclays branches. They are dubbed 'multi-level marketing schemes' because they work by signing up customers to flog expensive cosmetics or health products to friends, family and neighbours. Typically, recruits work as and when they want — as they're technically self-employed — to supplement household income. Often they're promised promotions and extra cash if they regularly sign up new sellers. Critics have accused the companies of having a similar selling style to pyramid schemes — illegal businesses that promise staff rewards for enrolling others, as opposed to offering income for selling products. DAILY MAIL

BHS collapse: Sir Philip Green's reputation and knighthood depend on pension offer, say MPs
Sir Philip Green will have to make a generous offer to rescue the BHS pension scheme if he wants to save his reputation and knighthood, MPs have warned after a fiery six-hour hearing with the billionaire retail tycoon. Green promised to resolve the problems facing the pension scheme and apologised for the collapse of the department store chain during an extraordinary parliamentary meeting that ran from just after 9am until 3pm. The tycoon, who declined to provide details about his rescue plan, repeatedly clashed with MPs during the hearing, castigating Richard Fuller, the Conservative MP, for staring at him in a “really disturbing” way and accusing committee chairman Iain Wright of being “really rude”. MPs are now planning to call Green’s wife, Lady Green, to give evidence. Monaco-based Tina Green owns the family’s business interests, including Arcadia, the parent company of Topshop, Wallis and Dorothy Perkins. BHS is being wound down after administrators failed to secure a rescue deal, putting 11,000 jobs at risk and leaving it with a £571m pension deficit. Green controlled BHS for 15 years until March 2015, during which time the tycoon and other investors collected more than £580m in dividends, rent and interest payments. Green sold BHS to Dominic Chappell, a three-time bankrupt whose consortium, Retail Acquisitions, extracted at least £17m from the retailer. However, while insisting the demise of BHS was “my fault”, Green also pointed the finger at the pension trustees, the Pensions Regulator, Goldman Sachs and Chappell’s advisers, Grant Thornton and Olswang. GUARDIAN

350,000 renters put at risk of eviction, according to report
More than 148,000 renting households – equivalent to 350,000 people – were put at risk of losing their home in the 12 months to April, according to a new analysis of government figures by housing charity Shelter. People renting in the London boroughs of Enfield, and Barking and Dagenham faced the greatest risk of eviction, the charity said. In each of these boroughs, one in 23 rented homes were “under threat” during the period in question – which worked out as 2,314 households in Enfield, and 1,647 in Barking and Dagenham. Shelter also reported that the volume of people facing eviction who were approaching the charity for advice “was getting higher and higher”. A spokeswoman said: “In the past year alone, over 9,800 people facing eviction have called the Shelter helpline for advice, and 500,000 people have visited the Shelter website’s eviction advice pages.” GUARDIAN

Thursday, 9 June 2016

Thursday, June 09, 2016 Posted by Hari No comments Labels:
Middle-class savings squeeze: a third of ABC1 families borrow to pay an unexpected bill of £500
According to a new YouGov survey, 31% of ABC1 workers, which includes junior managers and professionals, would struggle to pay an unexpected £500 bill. The figure rises to 46% for manual workers and the unemployed. Overall, 14% of those questioned could not pay a bill of just £100 without borrowing. Although inflation is currently low, many workers have not had pay rises for years. The Bank of England said last month that it expected inflation to increase in the second half of the year, which could put more pressure on some households. Women were less likely to have spare cash than men, while almost half of those aged 18 to 24 would not be able to find £500, compared with 23% of those aged 65 and over. The Money Advice Service has found that four in 10 UK adults have no more than £500 in savings, while a survey by ING bank suggested that 28% had nothing at all in their bank account. Family debt stood at an average of £13,520 at the start of the year due to the availability of cheap credit, according to Aviva. The figure had jumped by £4,000 in just six months to the highest since the summer of 2013, the insurer said. The Aviva report suggested that the typical family had a savings pot worth £3,150. BBC NEWS

Mike Ashley admits his Sports Direct staff were not paid minimum wage
Mike Ashley’s Sports Direct is facing a multimillion-pound bill in fines and back pay after the billionaire admitted his company had broken the law by failing to pay staff the national minimum wage. The concession, which was made as Ashley appeared in front of MPs investigating his firm’s treatment of its workers, confirmed the findings of a Guardian investigation last year. Ashley, who could also face being disbarred as a company director because of the breach, admitted that at a “specific time” Sports Direct effectively paid workers less than the minimum wage because they were held back at the end of their shift and searched by security before leaving the company’s warehouse. The practices contributed to many staff being paid an effective rate of about £6.50 an hour against the then statutory rate of £6.70, which potentially saved the FTSE-100 firm millions of pounds a year at the expense of some of the poorest workers in the UK. While the admission that the company was breaching employment law was the main headline, the MPs also extracted a string of revelations, with Ashley telling them that: it was “unacceptable” for the company’s workers to be docked 15 minutes of pay for being one minute late for work; he is struggling to control the company he founded and in which he still owns a majority stake; he would review the use of the controversial “six strikes and you’re out” policy under which workers are sacked for six black marks within six months. But Ashley added: “I’m not Father Christmas, I’m not saying I’ll make the world wonderful.” Union officers from Unite said there had been 110 ambulance callouts to the warehouse, including 38 times when workers had complained of chest pains. Five ambulances had been called to Sports Direct’s warehouse in birth and miscarriage-related matters, including one worker who gave birth in the toilets. MPs also heard that some staff received their wages through a pre-paid card. Staff were charged £10 to get a card, plus a £10-a-month management fee, 75p to use it at an ATM machine, and 10p when they got a text message confirming they had used it. Unite warned that any compensation for breaking the minimum wage laws will likely only benefit the 200 warehouse employees, not the 3,000 temporary workers. GUARDIAN

Unfairly fired: Rogue trader who lost his bank £3.8bn in one of the biggest trading scandals in history awarded £350k damages
Jerome Kerviel was fired by Societe Generale in 2008 and jailed after racking up a record trading loss of £3.8billion at the bank. But yesterday the Frenchman won a claim for unfair dismissal at an employment tribunal in Paris – and £350,000 in damages from Societe Generale, including a £234,000 bonus for his work in 2007. The court ruled that Kerviel, 39, had been fired ‘without genuine or serious cause’ despite bringing the bank to its knees. It said the bank had known about Kerviel’s dodgy trades long before he was shown the door, adding that he was dismissed not for his actions but for their consequences. Kerviel’s lawyer, David Koubbi, said the ruling ‘tore apart the story which Societe Generale has presented from the beginning’. While Societe Generale has sought to pin the blame for the losses entirely on Kerviel, the former trader has claimed his bosses were happy to turn a blind eye so long as his trades were profitable. The bank lost £3.8billion in a matter of days in January 2008 as it rushed to close out £39billion of trading positions taken by Kerviel. He was found guilty of a breach of trust, forgery and computer abuse in 2010 and sentenced to five years in prison, with two years suspended. He was also ordered to repay the money lost by the bank – something he is fighting. DAILY MAIL

BHS executives brand owner Dominic Chappell 'a liar'
The former owner of BHS, Dominic Chappell, has been accused of being "a liar" who had his "fingers in the till" by top BHS managers. The claims were made to MPs at a hearing into the collapse of the firm. In a scathing attack, the ex-chief executive of BHS, Darren Topp, alleged Mr Chappell threatened to kill him during a row over company money. Mr Chappell described that claim as "absolute rubbish" in a comment to a reporter after he had given evidence. Mr Chappell’s Retail Acquisitions bought BHS for £1 last year. Earlier, Mr Topp said he initially took Mr Chappell's claim to be a turnaround specialist and property expert at face value. When Mr Chappell's promises "unravelled", rather than "putting money in" he had "his fingers in the till," Mr Topp said. Former BHS financial consultant Michael Hitchcock was similarly scathing of Mr Chappell and his team. He told MPs: "I think I was duped. I think the technical term is a mythomaniac. The lay person's term is he was a premier league liar and a Sunday pub league retailer. At best." There are questions over Mr Chappell’s decision to transfer about £1.5m out of the company to Sweden. Mr Topp said his initial reaction to hearing of the transfer was to call the police. During a heated phone call, Mr Topp told MPs, Mr Chappell threatened to kill him. "If you kick off about it, I'll come down there and kill you," Mr Chappell is alleged to have said. Meanwhile, Mr Hitchcock said he was forced to change the company's bank mandate to "stop any chance of money flowing outside of the business". Mr Chappell also said he was looking at launching a legal suit against Arcadia and Sir Philip over a BHS property sale by the tycoon to his stepson. He claimed that BHS missed out on £3.5m because of it. The BHS pension scheme, fully funded a decade ago, now has a £571m pension deficit and negotiations over plugging these liabilities formed a key part talks to rescue the retailer. The Business, Innovation and Skills Committee and the Work and Pensions Committee are hearing evidence into the collapse of the 163-store group, which resulted in up to 11,000 jobs losses and left a huge hole in the pension fund. BBC NEWS

One-third of WPP investors revolt over Sir Martin Sorrell's £70m pay
Sir Martin's pay is the largest received by the boss of any British publicly listed company and has increased from the £44m he received last year, when 22pc of shareholders protested against the company's remuneration report. WPP, the world's biggest advertising group, reported an 11pc rise in yearly sales to £4.2bn in the first four months of the year. Standard Life Investments, which holds 17 million shares comprising just under 2pc of the company, voted against WPP's remuneration report, repeating its opposition to Sir Martin’s pay and influence in the boardroom that it had raised at last year's AGM. Euan Stirling, head of stewardship at Standard Life, said: “We clearly move closer to the day that a new chief executive will need to be recruited." He said the money Sir Martin receives could be better used to recruit someone with the “redoubtable talents of Mr Sorrell”. Asset manager Hermes, a 1.2pc shareholder, said before the vote that it would not be supporting the remuneration package, citing concerns about the “remuneration committee’s apparent lack of vigour and stress-testing”. The non-binding vote mirrors recent bust-ups over executive pay at BP, where chief executive Bob Dudley’s £14m remuneration package attracted opposition of 59pc, while Anglo American’s boss Mark Cutifani faced a 42pc “no” vote against his £3.4m compensation last April. TELEGRAPH

Victory for buy-to-let landlords: Court rules building society unlawfully hiked mortgage rates when base rate had not moved
Landlords who took West Bromwich Building Society to court after it raised tracker rates in December 2013 have won an appeal this morning arguing the move was unlawful. Tracker mortgages are meant to rise and fall with any movement of the Bank of England base rate, which has been glued at a historic low of 0.5 per cent since March 2009. However, West Brom argued that in the smallprint of its buy-to-let contracts – the fact it said it could change the rate 'to reflect market conditions' - it was allowed to raise rates despite no movement on base rate for nearly five years. As a result, it bumped up rates by two percentage points. For many, this doubled their monthly repayments. The case went to the Financial Ombudsman who found in favour of the mutual. It stated regulatory capital requirements had changed and funding costs had gone up, meaning the move was reasonable. It then went to court after 400 landlords launched a legal battle in March 2014. It was led by retired mortgage broker Mark Alexander of Shipdham, Norfolk, who argued he was unfairly asked to pay more for a buy-to-let mortgage because the West Bromwich Mortgage Company classed him as an 'investor' not a 'consumer'. They were dealt a blow in January 2015 when a High Court judge ruled in favour of the mutual – but were allowed to appeal. And this morning the group won at the Court of Appeal. It will result in 6,250 borrowers getting a refund. West Brom says it will cost its savers and borrowers £27.5million. The Court of Appeal decided the mutual was not entitled to vary its rates and could not call in the loans at short notice. Some affected landlords have more than one property with a West Brom buy-to-let mortgage, meaning far higher bills. Mr Alexander said the case win sets a precedent for others with tracker mortgages. Lawyer Mark Smith, who represented Mr Alexander, estimated that around 15,000 West Bromwich customers are affected and as many as a million people in total throughout the UK. DAILY MAIL

Wednesday, 8 June 2016

Wednesday, June 08, 2016 Posted by Hari No comments Labels: , , , ,

By tax specialist Jolyon Maugham QC at
Twitter @JolyonMaugham

This year we’ll collect a little less than £170bn of income tax, roughly a third of all tax receipts. We’ll also forego through reliefs about £30bn of income tax.

Spread evenly amongst the population that £30bn would deliver to every man, woman and child almost £500 a year.

But it isn’t. It goes overwhelmingly to those who need it least. And that’s not mere happenstance. It’s the inevitable consequence of two deliberate policy choices: to distribute that £30bn through the tax system. And to fail to monitor what good it does.

Let me give some specifics.

Last year we spent £480m per annum rewarding those who earn more than £54,000 per annum and make gifts to charities. We spent nothing rewarding those who earn less.

This year we’ll spend £2.6bn per annum encouraging saving in ISAs. But the average ISA holder with annual earnings of more than £150,000 will get – through higher savings relieved from income tax at higher rates – well over 6 times as much tax relief as her equivalent earning between £20,000 and £30,000 per annum.

In 2013/14 the highest earning 1% of taxpayers made almost 13% of all contributions to pension schemes. Pension scheme relief costs £21bn in income tax foregone. But that 1% of taxpayers – roughly 0.5% of adults – will get even more than 13% of that £21bn because we give them a larger tax bonus than those who earn less.

HMRC doesn’t publish much data on how the benefit of these reliefs is distributed between rich and poor. By and large you have to stitch the statistics together.

But HMRC does track one particular sub-set of reliefs: “Allowances given as tax reductions”. It comprises, in particular, Venture Capital Tax Relief, Enterprise Investment Scheme Relief and Seed Enterprise Investment Scheme Relief. Remarkably Additional Rate Payers – those earning over £150,000 – receive 69% by value of those reliefs. That figure has risen every year since 2010/11.

More striking still, the highest earning 15,000 taxpayers – an almost homeopathic 0.05% of all taxpayers – netted 5.5% of total deductions and reliefs. Most will have seen six figure reductions to their income tax bills.

Why is this? Should we be concerned?

It’s hard to find sense in it.

Take pension tax relief as an example.

The more you earn, the more likely you are to have surplus income. Because you have surplus income you’re less in need of incentives to save for your retirement. But the tax system gives you more.

That’s not sensible policy. It’s a wasteful bung.

We can make the same argument for ISAs. If a couple can afford to save what the median household earns (after direct taxes and benefits) – and that’s what the annual ISA limit for a couple represents – why do we spend money giving them incentives to save? If there’s money to be spent, surely we bolster the position of those who struggle to save rather than those compelled to by surplus income.

We don’t need to reward the wealthy for making donations to charity. The impulse to donate is a civic responsibility. It doesn’t need to be greased. Only the wealthy win, and the causes they prioritise. Good for Opera Houses; Youth Clubs, not so much.

These – I can put it no politer than ‘anomalies’ – have two related causes.

First, we deliver these reliefs through the tax system. It must be this that has led us unthinkingly to give most generously to those who have the highest earnings and so pay the most tax. But to achieve the public ends these tax reliefs serve does not require that we forego the most from those who pay the most.

That brings us to the second. We have no mechanism for assessing what public good we achieve with this £30bn. The absence means our political class need not confront the question. And what they can pretend they don’t know they can pretend they needn’t remedy. This state of affairs is convenient to them. Because the noise made by the losers from tax decisions tends to drown out the applause from those who’ve won.

But there is an answer. And a precedent.

Interest rates decisions were once heavily politicised. Were they still, now, in the hands of the Government the UK would be a more dangerous place. After seven years of near zero interest rates could any Government hold the line between depositor pensioners and the borrower working age population? But, devolved to the Bank of England, the political heat has simply evaporated.

As it was with interest rate decisions, so it could be with tax reliefs. Value for money assessments, decisions around functioning, decisions around shape; all these could be devolved to an independent body such as the Office for Budget Responsibility. Over time, and insulated from political heat, it could reshape tax reliefs to operate in the public interest.

Thursday, 2 June 2016

Thursday, June 02, 2016 Posted by Hari No comments Labels:
Student petition forces debate in Parliament over hike in loan paybacks 
When higher fees and loans were introduced in 2012, ministers said the repayment point would rise in line with average earnings. But last year, the government decided to freeze it at £21,000, meaning students will start paying off their loans sooner than was originally planned. Campaigners say lower-paid graduates will be hit particularly hard by the change because they will be paying a larger percentage of their monthly income. The petition, started last week by Alex True, an engineering student at Durham University, calls for the retrospective changes to the student loans agreement to be stopped. "By introducing retrospective changes it threatens any trust in the student finance system," the petition argues. It says the changes will mean 2 million graduates will end up paying £306 more a year by 2020-21 if they earn over £21,000. Money Saving Expert's Martin Lewis, who was involved in the consultation process on the original plan to reform student loans, called the change "a disgrace" and welcomed the petition's success. "It is fantastic that this petition's numbers exploded so quickly to force a parliamentary debate... Having said that, I have already engaged lawyers, written to the prime minister and met with Jo Johnson, Minister of State for Universities and Science, and at every stage, the government has pig-headedly refused to budge even a fraction. My concern is even after a parliamentary debate they'll put their fingers back in their ears." BBC NEWS

Sugar tax will hit poorest hardest, as Costa chai lattes are excluded
The Treasury said soft drinks would be taxed because they were the main source of added sugar in children's diets. But the Taxpayers' Alliance (TPA), which wants the levy to be axed, tested 49 drinks and found that some coffee shop drinks had more sugar than Coca Cola, but would not be taxed. The TPA survey found that Coca-Cola, with 10.6g of sugar per 100ml, will be subject to the levy, but a Starbucks signature hot chocolate with whipped cream and coconut milk, which has 11g of sugar per 100ml, will not. The study also noted energy drinks such as Monster Origin, 11g/100ml, will be taxed, but Tesco chocolate flavoured milk, 12.4g/100ml, will not be. Overall, the 10 most sugary drinks analysed by the group which campaigns for lower taxes will not be subject to the levy. Four are from branded coffee chains, the others are all flavoured chocolate milks. TPA chief executive Jonathan Isaby said it was "deeply concerning" that the government was "pushing ahead with this regressive tax which will hit the poorest families hardest". The Treasury says treating obesity and its consequences costs the taxpayer £5.1bn every year. The recommended maximum intake of added sugar per day for those aged 11 and over is about 30g or seven teaspoons. BBC NEWS

Proposed new rules mean online comparison sites can ditch small energy suppliers
Consumers can provide basic details to price comparison websites, which then provide what they believe to be the best options. But it was often not clear that they only showed options for firms that have paid the site a commission or fee. Following the Competition and Markets Authority (CMA) investigation into the energy market, it concluded that such sites should make it clear whether they received a commission from the energy firms whose offers were being recommended. However, it also said that price comparison websites such as Uswitch, Energyhelpline or Go Compare should no longer have to show all available energy offers. That would mean that only firms that pay the fees, such as the "Big Six," will show up in searches under proposed new rules. Six smaller providers fear that such a move would discourage competition. "Millions of people go to price comparison websites believing them to be transparent shop windows for the cheapest prices rather than 'brokers' in an increasingly skewed market," according to a letter to the Energy Secretary, Amber Rudd, signed by the chief executives of GB Energy Supply, COOP Energy, Go Effortless Energy, Bulb, So Energy & Zog Energy. The CMA is set to publish its final recommendations on remedies for the energy sector before the end of June. The Government said that before it came to power in 2010, there were just 13 energy suppliers, with independents accounting for only 1% of the market. The Department for Energy said there were now more than 40 providers, with smaller firms making up 15% of the dual fuel market. BBC NEWS

A million more youngsters to live with parents, says Aviva
The main reason is the affordability of housing, the company said. The study forecasts that 3.8 million people aged between 21 and 34 will be living at home by 2025, a third more than at the moment. The number of households containing two or more families is also expected to rise, from 1.5 million to 2.2 million. "Multigenerational living is often seen as a necessity rather than a choice, particularly when adults are forced to move back in with family to help save for long-term goals like buying their own house," said Lindsey Rix, managing director of personal lines at Aviva UK. "But rather than being an inconvenience, our report shows it is often a positive experience, with shared living costs reducing financial strain and the added benefit of constant company." Figures from the 2011 census show that 1.1 million households in England and Wales were officially overcrowded. In London 11.3% of all homes were overcrowded, rising to 25% in the London borough of Newham, the worst affected area in the country. BBC NEWS

Number of retirees expecting to leave an inheritance HALVES in just five years as they dole out money to support families
Some 52 per cent of people who retired in 2011 planned to leave an inheritance, but only 28 per cent stopping work this year said they would follow suit. Research by Prudential says its findings highlight a potential reason for this decline, which is that 35 per cent of retirees are already providing ongoing support to their families. More than a third of this year's retirees are providing financial help of £250 a month on average, while one in seven are spending more than £500 a month - and their assistance often spans several family generations. Those who do so are helping out an average of four family members. Some 81 per cent are supporting children and their children’s partners, 30 per cent their grandchildren, 15 per cent their own parents, and 5 per cent their grandparents. Other reasons for fewer retirees planning to leave an inheritance are the need to fund a retirement lasting on average 20 years, the declining numbers retiring on final salary pensions, and the prospect of paying care costs in future years, according to Prudential. The trend towards retirees sharing their wealth with family members during their later years has emerged in an era when younger people can face bigger financial challenges than older relatives did in their own youth. These include the sky-high costs of taking out loans to pay for university, buying or renting a home, and putting aide enough for pensions that are likely to be much poorer value in future. DAILY MAIL

France seeks €356m (£276m) in unpaid tax from
Documents filed with US regulator said French authorities recently completed an audit of's accounts from 2003 to 2012. The French government said had a base in France and was obliged to pay income and value-added taxes. The company said the majority of funds being sought are penalties. "In December 2015, the French tax authorities issued assessments for approximately €356m, the majority of which would represent penalties and interest," the filing with the Securities and Exchange Commission said. The company said believed it complied with local tax law, and would contest the ruling in court if it could not reach a settlement with the French government. In the same filing its parent company Priceline said Italian tax authorities were examining "whether should be subject to additional tax obligations in Italy". Last week, Google's headquarters in Paris were searched as part of an investigation into possible tax evasion. BBC NEWS

Blatter, Valcke and Kattner awarded themselves £55m, say Fifa lawyers
The spectacular scale of greed at the top of Fifa was revealed on Friday when lawyers said that three high-ranking former officials – Sepp Blatter, Jérôme Valcke and Markus Kattner – had secretly given themselves pay rises and massive World Cup bonuses totalling 79m Swiss francs (£55m). The lawyers acting for Fifa said the contracted payments were made during the officials’ last five years in office. They appeared to violate Swiss law. Evidence will now be given to the US justice department and to Swiss federal prosecutors who are investigating the financial scandal engulfing the world football body. Fifa revealed details of the contracts of its former president Blatter, former secretary general Valcke and former finance director Kattner one day after police raided its offices to seize evidence for the Swiss investigation. It is understood Blatter received £23.3m, Valcke £22.9m and Kattner £9.5m. The raid included searches in the office of Kattner, Fifa’s German deputy secretary general, who was fired last week. The Swiss attorney general, Michael Lauber, opened criminal proceedings against Blatter last September, and against Valcke in March. Both are suspected of criminal mismanagement of Fifa money. Blatter and Valcke deny wrongdoing but were banned for six and 12 years respectively by Fifa’s ethics committee. GUARDIAN

'Like giving your car keys to a five-year-old': Sir Philip Green savaged by City grandees for selling BHS to a three-time bankrupt playboy
The billionaire tycoon was lambasted for putting the reputation of British business at risk amid mounting anger over the demise of the 88-year-old chain and loss of up to 11,000 jobs. Green sold the company to three-time bankrupt and playboy Dominic Chappell for just £1 last year and has faced fierce criticism over his handling of the situation in recent months. Lord Myners, the former chairman of Marks & Spencer and a former City minister, said selling BHS to Chappell was 'like giving the keys of your car to a five-year-old'. The boss of the Institute of Directors – which traditionally stands by senior businessmen and women – also launched a fierce attack on Green. Simon Walker said: “Sir Philip is a very high-profile business leader. He is the person who is on the front page with Kate Moss on his arm and who has a £100million super yacht and so on. 'When someone like this ends up behaving like this, people think that's how business is, and it's not.” On Thursday, BHS's administrator Duff & Phelps announced the business will be wound down and all 164 shops closed and sold to other retailers after it failed to find a buyer. DAILY MAIL
Thursday, June 02, 2016 Posted by Hari No comments Labels: , , , , , , , ,

SOURCE INDEPENDENT: EU Referendum - Conservative rifts deepen as MPs call for David Cameron to quit
Bill Cash, a veteran Eurosceptic who chairs the European Scrutiny Committee, branded the PM's EU Remain campaign “monumentally misleading propaganda". His comments follow a weekend of Tory attacks on Mr Cameron, which were led by Nadine Dorries, who said she believed he will be “toast” within days of a Brexit vote and branded him an "outright liar". Prominent backbencher Andrew Bridgen also said that more than 50 MPs were ready to move against the Tory leader if Britons vote for Brexit on June 23. In another attack, employment minister Priti Patel said Mr Cameron was “too rich” to care about immigration. Meanwhile, Michael Gove and Mr Johnson launched an unprecedented attack on the Prime Minister's authority as they accused him of a having a “corrosive” impact on public trust in politicians because he had not lived up to promises to cut immigration.

SOURCE DAILY MAIL: David Cameron could be ousted as Prime Minister whether he wins or loses EU vote as MPs pledge to a force a coup if he fails to stop Tory civil war
Senior backbench Tory MPs this morning pledged to force a vote of no confidence if he fails to stop the blue-on-blue infighting that has rocked the Conservatives in the first week of the EU referendum campaign. The challenge to the Prime Minister's leadership came as Iain Duncan Smith, his Work and Pensions Secretary, launched an astonishing attack on his approach to the referendum this morning, accusing him of having a 'low opinion' of British people and leading a 'pessimistic' campaign. Just 50 Tory MPs are needed to trigger a vote of no confidence in the leader - meaning just over a third of the 139 pro-Brexit Tory names would be needed to trigger a coup and paving the way for Boris Johnson to become Prime Minister. A senior Tory MP told the Sunday Times: 'Cameron's position will be untenable even if he wins the referendum if he carries on like this. There will be no problem getting 50 names.'


Election 2015: more voters swung left than right. It was the constituency boundaries wot won it!

Osborne's 2016 budget protects the wealthiest while the most vulnerable suffer

Department of Health consultation embarrassingly shows public strongly against Tory plans for NHS

Our NHS is expensive? Comparable countries' public/private mix costs them even more

The poorest 10% get 18 fewer years of health than the top 10%, and 9 fewer years of life

NHS budget is protected? Not per head, which is what counts. Our growing and ageing population means it's a £5bn/year cut

Cuts to the NHS, Military, the Courts, Prisons, Benefits, Passports... Will fixing the chaos end up costing more than the cuts saved?

Liebrary: PFI saves us virtually nothing, if you believe the NAO’s figures. If you believe the Commons Treasury Committee, it costs us a vast amount that nobody has yet quantified

Thursday, 26 May 2016

Thursday, May 26, 2016 Posted by Hari No comments Labels:
HS2 rail link 'over-priced' say transport experts
The academics - including some leading lights in transport - support high-speed rail overall, but say HS2 is five times more expensive than its French equivalent. HS2 has been designed to increase capacity and connections, regenerate the North and reduce climate impacts change. Yet the critics say it will only achieve one of these - capacity. Many key rail journeys, they say, would be worse, including to Nottingham, Stockport and Wakefield. The academics are especially baffled by the decision to design HS2 to run ultra-fast at 240mph - that's much faster than the 190mph normal for continental high-speed trains covering much greater distances. One of them, Professor James Croll of UCL, told BBC News: "It is just vanity... The UK is far too small geographically to need an ultra-high speed network - by the time the trains get up to speed it will be almost time to slow them down again... The decision to design for 240mph has led to a succession of needlessly expensive knock-on effects in construction which will be saddling taxpayers with huge bills for a generation." The group says the ultra-fast trains will also push up carbon emissions. They say the extra speed from ultra-fast services requires 23% more energy, but saves just 3.5 minutes from London to Birmingham. Professor Tony May from Leeds University said we need "...a less damaging version of HS2, a better-connected new line from London and transport investment in the North rather than to the North.” BBC NEWS

Top model agencies colluded to fix prices, competition regulator says
Some of Britain’s top model agencies colluded to fix prices charged to retailers, fashion brands and other customers, the competition regulator has alleged. FM Models, Models 1, Premier, Storm and Viva agreed to exchange competitively sensitive information, including future prices, from April 2013 to March 2015, the Competition and Markets Authority (CMA) alleged. In some cases, agencies agreed a common approach to pricing, the CMA added. The allegations are aimed at the pinnacle of the British modelling industry: Premier was the agency that launched Naomi Campbell’s career, Storm discovered Kate Moss and Cara Delevingne, and Models 1 represents Sophie Dahl and Yasmin Le Bon. The agencies allegedly used the Association of Model Agents (AMA) trade association as a vehicle for price co-ordination when their representatives controlled the AMA’s managing council. The association circulated regular “AMA alerts” encouraging agencies to reject fees offered by customers and negotiate higher payments, the CMA said. The CMA published its provisional findings after an investigation that began in March 2015. The regulator reportedly raided agencies’ offices, interviewed staff and seized computer hard drives and files last year. Stephen Blake, the senior director of the CMA’s cartels and criminal group, said the investigation was the first competition enforcement case in the creative industries, which are an important part of the UK economy. All sectors should have vigorous competition to encourage better services, lower prices and efficiency to benefit the economy. GUARDIAN

New London mayor Sadiq Khan condemns foreign millionaires who buy UK flats as ‘gold bricks for investment’ but never live in them
Speaking at a question time event in London, Mr Khan said ‘It is possible to build 50,000 new homes a year, some people say, but there is no point if they are all built by investors in the Middle East and Asia and they are used as second homes or sit empty. The important thing is to build the right sort of homes...that are affordable to Londoners to buy or rent. That is what I intend to do.' It comes amid claimed Britain's tallest residential skyscraper - St George Wharf Tower in London - is mostly owned by wealthy foreign investors who do not actually live in the property. Nearly two thirds of the 214 apartments, most worth around £1million, are owed by overseas buyers, who include controversial oligarchs and foreign politicians. The five-storey penthouse was reportedly bought by Russian billionaire Andrei Guriev for £51million. Sadiq Khan's administration today vowed to crack down on buyers who snap up property as an investment, and to give Londoners 'first dibs' on new homes. DAILY MAIL

NHS hospitals in England reveal £2.45bn record deficit
The combined deficit is almost three times bigger than the £822m overspend incurred the year before, and more than 20 times the size of the £115m deficit in 2013-14. The overspend is a major embarrassment for the government, because the Treasury told the NHS last year that it should not be more than £1.8bn. The size of the figure threatens to wreck this year’s financial planning for the NHS, which was based on wiping out a deficit of that size. The service, already strapped for cash as it negotiates a decade-long period of historically low annual increases in its budget, will now have to find £700m to bridge that gap. NHS finance experts said the true scale of the deficit was much worse than the £2.45bn headline total but had been masked by a series of accounting devices. Tom Kibasi, director of the IPPR thinktank, criticised “crisis-driven decisions” to use “accounting tricks”, such as selling assets, to disguise the true extent of their financial plight. He called for an investigation by the National Audit Office to ascertain the NHS’s true financial situation. Around £1bn originally earmarked for capital spending last year – for building and maintaining hospitals and buying equipment – was transferred into the NHS’s resource budget to help cover normal running costs. Chris Hopson, the chief executive of NHS Providers, which represents hospital trusts, said: “Today’s report reveals how the combination of increasing demand and the longest and deepest financial squeeze in NHS history is maxing out the health service.”  Hopson pointed out that Britain spent a lower percentage of its national wealth on health than France, Germany, Sweden or Greece, and that investment as a proportion of overall public spending would fall even further over the next few years to less than 7% by 2020. GUARDIAN

Rip-off pension exit fees banned at last: Regulator caps exit fees at 1% for savers who want to enjoy new freedoms
The move could save around three-quarters of a million savers thousands of pounds towards their retirement. Firms will not be able to apply any exit fee at all on contracts entered into after the new rules come into force. New pension freedoms were announced last year to great fanfare, offering over-55s greater control over their retirement savings than ever before. Until then, most people would have to convert their nest eggs upon retirement into an annuity – a product that guarantees an income for life. Annuities have been falling out of favour as they are often poor value and allow little flexibility. However plans to ditch annuities and allow savers to spend, invest or save their pension pots as they choose were thwarted by eye-watering exit fees imposed by firms that made taking advantage of the new freedoms prohibitively expensive for some. Earlier this year Chancellor George Osborne pledged to change the law so savers using new freedoms to access their cash early would not be stung by the huge fees that could snatch up to 20 per cent of their nest eggs. DAILY MAIL

Google Paris offices raided in £1.2 billion tax probe
The dawn raid, which involved around 100 investigators, is part of a probe into whether the internet giant has evaded corporation tax in France by diverting profits to its European base in Ireland.  French authorities believe that Google owes some €1.6bn (£1.2bn) in corporation tax and VAT. The raid comes months after the company agreed to pay £130m in back taxes to the UK Government and amid growing scrutiny of the tax affairs of Silicon Valley’s multinationals. In January, after years of pressure, Google agreed to pay six years of UK back taxes to the Treasury and said it would book sales from domestic advertisers in the UK. The agreement with the Treasury was criticised by Labour for allegedly understating the true amount it should owe. Google, like many major tech groups, bases its European operations in Ireland, where corporation taxes are lower than much of Europe, and registers sales from many other countries there. But the company is now facing increasing scrutiny amid growing anger at multinationals’ tax affairs. French authorities are now trying to establish whether sales registered in Ireland were in fact conducted in France. TELEGRAPH

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