Thursday, 20 October 2016

Thursday, October 20, 2016 Posted by Hari No comments Labels:
TfL to take over London's suburban rail services? Mayor Khan vows to end 'nightmare' delays and overcrowding
Plans to improve rail services for millions of London commuters have been submitted to the Government in a bid to end the “nightmare” of delays and overcrowding. Presenting his business case for devolving suburban rail services to Transport for London, Mayor Sadiq Khan said passengers had been coping with poor services for too long. He said the move has cross-party support from in and outside London, including MPs, London boroughs and Surrey, Kent and Hertfordshire councils. Transport Secretary Chris Grayling has so far appeared lukewarm about the TfL proposal, with insiders suggesting he was concerned about the impact on Kent and other counties outside London. However, he is not thought to be against more devolution in principle, and TfL hopes that with county councils on board he could be persuaded to hand over more control. TfL’s case focuses on suburban rail, but spells out that longer-distance services going beyond London’s boundaries would still be run by the Government and suggests these  commuters would benefit from related improvements. Crucially Kent, which has previously voiced the strongest objections, now says it is open to discussions. TfL’s business case sets out how  further devolution would help tackle the housing crisis, with potential for up to 80,000 new homes to be built within one kilometre of stations on newly-devolved lines, as well as boosting economic growth including  thousands of extra jobs. EVENING STANDARD

Just 2.6% of grammar pupils are from poor backgrounds, new figures show
Just 3,100 of the 117,000 pupils who currently attend grammar schools come from families poor enough to be eligible for free school meals. The proportion of students (2.6%) is lower than previously reported, and was last night seized upon by critics of the government’s plans for more selection in the state system. Across all schools, the average proportion of pupils entitled to free school meals in areas that currently select on academic ability is thought to be around 18%. The figures, compiled by the House of Commons library from Department for Education records from January this year, illustrated how selection was failing those from the least affluent backgrounds. The government’s green paper on education reform proposes that existing grammar schools should be allowed to expand and new ones be allowed to open, while existing comprehensives could opt to be selective. It also proposes encouraging multi-academy trusts to select within their family of schools, in order to set up “centres of excellence” for their most able students. Lucy Powell, the former shadow education secretary, said there were now 23 Tory MPs who supported her campaign to force a government U-turn on their plans to introduce more selection. “All the evidence shows that selective education creates barriers for disadvantaged children rather than breaking them down,” she said. “These figures tell the real story. A minuscule number of children on free school meals pass the 11-plus.” GUARDIAN

NHS head disputes Theresa May’s £10bn claim over health funding
The chief executive of NHS England, Simon Stevens, disagreed with the prime minister’s statement, which she repeated on Monday, that “the government has not just given him £8bn extra, we’ve given him £10bn extra”. The £8bn was pledged last year by the then chancellor, George Osborne. Stevens told the Commons health select committee that the NHS had only received the money it had asked for in two of the five years covered by the £8bn: 2016-17 and 2020-21. For those two years the budget increases the NHS is due to get are “in the zone” of the sums it needs to implement its Five Year Forward View plan to transform patient care to keep the service sustainable.  “But for the [other] three years we didn’t get the funding we requested,” Stevens said pointedly. “As a result we have a bigger hill to climb. It’s going to be more of a challenge in 2017-18, 2018-19 and 2019-20 [than NHS chiefs expected],” he added. While the NHS would get only “modest” extra sums in 2017-18 and 2019-20, “2018-19 will be the most pressurised year for us ... [because] we will have negative per-person NHS funding growth.” Sally Gainsbury, a senior policy analyst with the Nuffield Trust health thinktank, said that while NHS trusts had cut their unit costs by 13% since 2010, their income had gone down by 18% over the same period. GUARDIAN

Self-employed 'now earning less than in 1995'
The Resolution Foundation said that while the UK's self-employed workforce had grown by 45% since 2001-02, their weekly earnings had fallen by £60. It blamed the rise of lower paid jobs and the financial crisis, which had reduced pay rates. Adam Corlett, economic analyst at the Resolution Foundation, said that almost five million UK workers were self-employed - about one in seven workers and a record high. They included construction workers, hairdressers, taxi drivers, tutors and IT consultants, he said. According to the research, average self-employed wages were £240 a week in the 2014-15 financial year - the most recent period for which data is available - down from about £300 a week in 1994-95. TUC general secretary Frances O'Grady said: "Britain's new generation of self-employed workers are not all the budding entrepreneurs ministers like to talk about. "While some choose self-employment, many are forced into it because there is no alternative work. Self-employment today too often means low pay and fewer rights at work." Some companies have recently been accused of taking advantage of self-employed staff. Taxi app firm Uber is awaiting the outcome of a employment tribunal after two of its drivers claimed it was acting unlawfully by not paying holiday or sick pay. The US company says it has 40,000 drivers in the UK, so the result could have a significant impact on its costs. Meanwhile, takeaway delivery firm Deliveroo faced protests in August after saying it would pay its self-employed drivers per delivery, rather than on an hourly basis. The firm, which was also criticised by the Department for Business, soon backtracked and made the scheme optional. BBC NEWS

Asda faces £100m bill in equal pay dispute
Asda is facing a £100m claim from thousands of female workers after a class action was given the right to proceed with their battle for equal pay. Around 7,000 shop floor workers have complained they were received between £1 and £3 an hour less than staff at Asda’s distribution centres, the majority of whom are men. The case dates back to 2002 and to date around 9,500 past and current workers from across the UK have joined the class action, which is represented by law firm Leigh Day. Asda said it “continued to strongly dispute the claim” and had tried to argue that because the shops and distribution centres were in different locations workers were entitled to separate pay arrangements. “This is a dramatic victory for the workers we represent”, said Lauren Lougheed, a lawyer in the employment team at Leigh Day. “Asda tried to argue that because the shops and distribution centres were in different locations, with different pay arrangements, that Asda could pay the men what they like... This judgment will have far reaching implications on other supermarket equal pay claims including those we are bringing on behalf of around 400 Sainsbury’s workers who are in a similar situation.” TELEGRAPH

Thousands of rural pharmacies under threat again after funding talks with ministers break down
One in four local pharmacies had been threatened with closure after ministers said they wanted to withdraw a £170million subsidy for community chemists. This meant that up to 3,000 out of the 12,000 pharmacies in the UK – many of which are in rural areas - faced closure. There was a temporary reprieve last month when new care minister David Mowat said he would wanted “to make sure we are taking the right decision”. However the Pharmaceutical Services Negotiating Committee said it has now been told it faces cuts of 12 per cent in the current financial year, with more to follow in the year after. Sue Sharpe, the committee’s chief executive, said that if pharmacies were forced to close it would simply add to the pressures on the rest of health service as more people would turn to their GPs. TELEGRAPH

Sir Philip Green: MPs recommend stripping BHS ex-chief of knighthood
BHS was sold by Sir Philip last year, but then collapsed with the loss of 11,000 jobs and carrying a £571m pension deficit. A lengthy three-hour debate was held, during which Sir Philip was attacked from MPs across the parties. They did not hold back. Among the most notable criticisms was that he was like the autocrat Napoleon and the former boss of the Mirror group of newspapers, Robert Maxwell, as well as being an "asset-stripper". Labour's David Winnick branded Sir Philip "a billionaire spiv who should never have received a knighthood. A billionaire spiv who has shamed British capitalism". He added that his "billionaire's lifestyle" was a "form of provocation" to BHS employees and pensioners. Conservative MP Richard Fuller said: "Freedoms that are given to people who have enormous power over fellow citizens are based on people doing not only the legal thing, but the right thing.” Frank Field, chairman of the Work and Pensions committee, said Sir Philip could have solved the problem easily and been of help in building a stronger pensions regime. "We are dealing with a man who has huge sums in wealth. He could have dealt with the pensions problem and walked away smelling of roses," he said. "He would have helped us begin to set the debate about how we deal with pension deficits. He had nothing to say and couldn't help us lead the debate." Mr Field is pressing for the Pension regulator to take legal action against Sir Philip to make good the BHS pension deficit. A damning MPs' report on the High Street chain's failure, published in July, concluded Sir Philip had extracted large sums and left the business on "life support". At the time Sir Philip described the report as "the pre-determined and inaccurate output of a biased and unfair process". BBC NEWS

Pension blow for five million: Treasury U-turn means retirees are stuck with their rip-off annuities
The U-turn is a huge blow to older savers who were forced to convert their retirement savings into annuities. They can no longer hope to escape the often poor-value deals. Ministers say they acted to stop pensioners being exploited – they were facing fees of up to 20 per cent for cashing in. But campaigners accused the Government of breaking its promises and leaving millions in the lurch. Bought by workers with their pension funds when they retire, annuities pay a regular income for life. Many produce meagre returns. Under pension freedoms introduced in April last year savers reaching retirement were told they no longer had to buy an annuity with their pension pots – and could instead spend the money as they liked. But the reforms excluded those who had already bought an annuity. Some had only small pension pots and received little income. Others were victims of mis-selling. Ministers announced a few months later that the freedoms would be extended to these five million annuity holders from next April. That raised hopes that a second-hand annuities market would spring up to throw them a lump sum lifeline. But insurers have proved reluctant to buy back the annuities – with as few as two in ten major players saying they intended to do so. For their part, savers faced handing over thousands of pounds for financial advice. The Treasury said it was scrapping the policy because so few firms had signed up and that savers risked being stuck with poor deals. It claimed that only a small proportion of pensioners would have cashed in. DAILY MAIL

Thursday, 13 October 2016

Thursday, October 13, 2016 Posted by Hari No comments Labels:
RBS destroyed customers' businesses for profit and rewarded staff who targeted struggling firms, leaked files suggest
New documents show a project, labelled by one executive in an email as a 'dash for cash', crippled firms as it dangled hefty bonuses to staff who targeted firms to be 'restructured.' RBS, which was bailed out in the financial crisis by taxpayers, allegedly destroyed thousands of businesses during the crisis to boost profits, according to the secret documents obtained by BuzzFeed News and the BBC. It is believed that RBS bought assets at rock-bottom prices when firms hit difficulties in the economic turmoil which erupted in 2007 to then flog for a profit. Staff were encouraged to target struggling companies and levy them with harsh fees. It meant many went bust while it boosted its own balance sheet. The documents support previous allegations made by now government business adviser Lawrence Tomlinson in 2013. He concluded that RBS deliberately destroyed viable businesses and used their financial turmoil as a way to hoover up assets cheaply. RBS customers have accused it for years of changing borrowing limits based on unrealistically low valuations of their business. Subsequently, many breached lending thresholds. It meant RBS then forced them into the hands of its so-called Global Restructuring Group. GRG would then apply higher interest rates and pressured customers to sell assets in order to repay loans, took equity stakes in businesses and pushed them into administration – all claims also made by Lawrence Tomlinson. GRG was wound-down by RBS in 2014, a year after the report. Roughly 16,000 businesses are said to have been put into GRG after the credit crunch, with loans issued by the unit increasing by a whopping 500 per cent to £65billion between 2007 and 2012. This allowed GRG to rack up healthy profits of £1.2billion in 2011. Many of the owners affected have stepped forward to say they suffered mental and physical health problems as a result of their treatment by the bank. DAILY MAIL

Travellers at risk of 'disgraceful' 'exchange rate profiteering' at airports
Consumer champion Martin Lewis, of, launched a fierce attack on financial companies for taking advantage as one leading airport bought at 1.35 euros and sold at just 97 cents. Tweeting a picture of a Moneycorp exchange rate board which showed buy-sell spreads had edged to more than a third, he wrote: "No wonder they shouted at me 'you're not allowed to photograph that'. Disgraceful exchange rate profiteering [content deleted]" David Buik, a markets commentator for leading stockbroker Panmure Gordon, said consumers were being widely exploited at airports: "The foreign exchange system is not down to Brexit alone... But the pound is under pressure and we are back to the volatility days. It is somewhat inevitable that they will capitalise on vulnerable people. They know exactly what they are doing." Holidaymakers were offered 97 cents for the pound at several airports on Friday after a torrid day in the currency markets following the overnight "flash crash". TELEGRAPH

Bernard Matthews sale sparks pension row as owners will get millions - but members of its pension scheme only 1p in the pound
The details are set to spark a fresh row over pension rights and whether owners should receive huge sums from firms despite black holes in retirement funds. The Bernard Matthews Pension Fund has been left with a gaping £17.5million deficit which is likely to swell to £20million, the report commissioned by MPs show. The business, best known for producing Turkey products, was placed in a special type of insolvency called a pre-pack administration which allows assets to be sold in advance of a firm going under, leaving creditors unpaid. Politicians on the Work and Pensions Select Committee are probing the sale and the use of pre-pack administrations. The MPs asked Professor Prem Sikka of the University of Essex to examine the pre-pack administration arrangement and he claims Rutland is likely to receive £39million. The proceeds of the sale will also be used to make a full payment of £46.4million to lenders Wells Fargo Capital Finance (UK) and PNC Financial Services UK. The administrators have already billed £790,000 and legal fees are likely to amount to £668,000. MPs claim the pre-pack administration arrangement acts against the interests of pensioners who need better protection. Sikka said: ‘The administration strategy seems to have been carefully crafted to enable secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and dump the pension scheme and other liabilities. No attention has been paid to the hardship caused to retired and existing employees’. DAILY MAIL

Crackdown on firms that won't prop up pensions: Regulator demands extra powers in wake of BHS collapse
BHS collapsed into administration earlier this year with a £700million black hole in its retirement scheme. Its failure puts the financial security of thousands of former employees at risk and has led to stinging criticism of former owner Sir Philip Green. The billionaire tycoon – who sold the 88-year-old retailer to three-times bankrupt former racing driver Dominic Chappell a year before its failure – has pledged to 'sort' the deficit but he is yet to make good on that promise. The collapse led to a joint probe by Parliament's business and pensions committees. Work and Pensions Select Committee chairman Frank Field has been a vocal critic of Green, accusing him of behaving like Napoleon and surrounding himself with 'yes' men. There is mounting anxiety over the burden large businesses face from their pension schemes. The 5,945 programmes overseen by the Pension Protection Fund had a combined deficit of £459.4billion at the end of August, £82.6billion more than a month earlier. Big names with major issues include Tesco, which has a £5.9billion black hole. However, a push to give the regulator more power is likely to meet stiff opposition from businesses. Any money put into paying down a firm's pension deficit cannot be handed out to shareholders in the form of dividends. In the case of privately-owned firms such as BHS, this simply means rich businessmen pocket less cash. But large public firms are often partly owned by major pension providers such as Aviva or Legal & General – so forcing them to pay out less could paradoxically hurt other savers. DAILY MAIL

Rent-to-own firm BrightHouse admits new customer affordability checks bring in fewer customers
The controversial retailer, which lets shoppers pay for goods in weekly instalments with annual interest rates of up to 99.9%, said that more detailed checks on shoppers’ finances were having a material impact on the number of customers signing contracts and hurting profits. The company is seeking to bring its practises into line with the regulatory regime overseen by the Financial Conduct Authority (FCA), which took over regulation of the rent-to-own sector from the Office of Fair Trading in 2014. The FCA revealed in the summer that it was concerned about some practices in the rent-to-own sector, including the way in which major players such as BrightHouse had been dealing with affordability assessments and customers who fall behind on payments. Rent-to-own firms sell furniture and other households goods to customers on weekly payment plans. The sector, led by BrightHouse, Perfect Home and Buy as You View, has flourished in recent years as it has become more difficult for some households to access credit. Interest rates are typically higher than on mainstream forms of borrowing. BrightHouse says its rates range from 69.9% to 99.9% depending on the customer’s credit history and length of contract. In the year to 31 March 2016, BrightHouse’s customer base shrank 0.4% to 276,200 as it screened shoppers more carefully, but the average monthly spend for each customer increased by 5% to £120.87. Group sales were up 5.4% at £370.7m, delivering a pre-tax profit before exceptionals of £21m, in line with 2015. Citizens Advice said last week that the number of people struggling with debts to rent-to-own firms and on guarantor loans rose by 16% in the second quarter, as borrowers no longer able to get payday loans move to other, less heavily regulated forms of borrowing. GUARDIAN

Brexit slowdown means 'lower rise' in living wage expected next year
Weak pay growth in the wake of the UK's vote to leave the EU is set to reduce the increase to the National Living Wage by 10p, the Resolution Foundation forecasts. The think tank now expects the rate to rise to £7.50 an hour next year. That would still mean an annual pay rise of up to £600 for full-time staff. The National Living Wage, which was introduced in April, currently stands at £7.20 per hour for workers aged 25 and over. About 4.5 million workers are expected to benefit from the increase - with the amount dependent on how many hours they work. Stephen Clarke, policy analyst at Resolution Foundation told the BBC's Today programme: "The National Living Wage relates to average earnings and because of Brexit, many forecasters, including the Bank of England, revised down their earnings growth; therefore the National Living Wage has also been revised down." Despite the fact that the increase is lower than expected, the report adds that the National Living Wage is still set to transform the country's low-pay, helping some 800,000 workers out of low pay by 2020. Low-pay is defined as an employee earning two-thirds of the country's typical hourly pay. BBC NEWS

Rail delays: New plans to compensate passengers when train is 15 mins late
Rail passengers can currently only make claims when services are delayed by at least 30 minutes. The Department for Transport (DfT) said its new scheme will initially launch on Govia Thameslink Railway services in the next few months before being expanded on other networks. Passenger and rail industry groups said they supported the plans. The changes would also see compensation of 100% of the single fare ticket value for delays of between 60 and 119 minutes. After its initial launch on GTR in the coming months, the DfT said the scheme will be expanded - starting with any new South Western, West Midlands and South Eastern franchises. GTR operates Southern services, which have suffered months of disruption and strikes on rail routes in south London, Surrey, Sussex and Kent. Commenting on the plans, Anthony Smith from watchdog Transport Focus said: "Train companies need to do more to alert passengers to compensation. Passengers expect the process to become smarter and automatic, taking the onus off them to have to claim in the first place - automatic Delay Repay is the way forward". The DfT said all future rail franchises will be required to introduce the compensation policy, and officials said they will explore opportunities to roll it out for all franchises during the current parliament. BBC NEWS

Thursday, 29 September 2016

Thursday, September 29, 2016 Posted by Hari No comments Labels:
Prime Minister warned as number of homeless hits record levels
Tory MPs have told Theresa May that tackling homelessness will be a key test of her commitment to social justice after official figures showed it had risen to its highest level for nearly a decade. A total of 15,170 households were classed as homeless in the three months to June 2016 - a jump of 10% on the same period last year. Around a third of these are in London, according to new figures from the Department for Communities and Local Government (DCLG). The last time a higher level was recorded in England was in the period April-June 2008, when 15,680 households were classed as homeless. Tory MP Bob Blackman, who is bringing his Homelessness Reduction Bill to the Commons for debate on October 28, said the figures were a national disgrace. His Private Member's Bill will impose a duty on local authorities to help prevent people at risk of losing their homes from becoming homeless and it is likely to need Government support to become law. A supporter of the Bill, Tory MP David Burrowes, said the Bill would be a litmus test of Mrs May's social justice credentials. The most common reason for losing a home was the ending of a tenancy with a private landlord. This is now causing a greater proportion of households to become homeless than at any point since current records began in 1998 - roughly a third (32%) of all reported cases in the three months to June 2016. Shelter chief executive, Campbell Robb, said: "Every day at Shelter we hear from families struggling to keep their heads above water when faced with the double blow of welfare cuts and expensive, unstable private renting, with far too many ultimately losing the battle to stay in their home. "On top of this, stripped-back budgets and a drought of affordable homes are making it increasingly difficult for overburdened councils to find homeless families anywhere suitable to live." DAILY MAIL

Osborne says the Bank of England's quantitative easing makes the rich richer
The former chancellor, George Osborne, has said that money printing by the Bank of England has made the rich richer and that interest rate cuts have hurt savers. Speaking from Washington in an interview with Bloomberg TV, Mr Osborne said: “We need to offset the very necessary loose monetary policy and the distributional consequences that it is having. Essentially it makes the rich richer and makes life difficult for ordinary savers.” “There’s a role for government policy not in stopping that monetary policy which keeps the economy strong but in mitigating its impact. I think all of us who believe in free markets need to work harder to find an answer to the anger that people clearly feel out there.” The Bank produced its own analysis in 2012 which showed that its quantitative easing (QE) scheme – which it restarted in August to support the economy in the wake of the Brexit vote – inflates asset values. And the Bank has acknowledged that the rich have more of these assets than the poor, meaning they automatically benefit more. Yet, as chancellor, Mr Osborne never commented on the distributional consequences of the Bank of England’s monetary stimulus measures or interest rate cuts, despite widespread complaints from some groups that QE was making the rich richer. His June 2015 budget was also widely criticised for entailing a much bigger cut to the incomes of poorer families than those in the top half of the distribution, as he slashed £12bn from the benefits bill by 2020. In the wake of the 2015 general election Mr Osborne also scrapped the Treasury’s distributional analysis charts showing the impact of overall budget tax and welfare changes, which critics said was born of a desire to disguise the regressive nature of his policies. The Institute for Fiscal studies has however, continued to publish the charts. Mr Osborne did, however, implement policies in office designed to help savers, such as pensioner bonds for the elderly and a virtual elimination of tax on savers’ interest income. In August the Bank's Monetary Policy Committee voted to increased its £375bn asset purchase programme by a further £70bn, made up of £60bn of Government bonds and £10bn of corporate bonds. INDEPENDENT

Thousands more NHS operations cancelled than figures show, report claims
Official figures in May showed the number of hospital operations in England cancelled at the last minute because of a lack of staff or beds rose to 74,086, its highest in 15 years. However, that statistic only records cancellations on the day of admission. About half of English NHS trusts admitted in response to Freedom of Information requests that they had cancelled nearly 42,000 operations between one and three days before patients were admitted. The new figures give a picture more in line with official figures published in Scotland, Wales and Northern Ireland, where the definition of last-minute cancellations is wider and is taken over several days. May’s official figures marked the worst record of cancellations for the NHS in England since 2001-02, when 81,743 patients had procedures cancelled on the day they were supposed to happen. Experts warned that the data was a sign of the pressures on the health service. At the time, Clare Marx, president of the Royal College of Surgeons, said that pressures on A&E units, staff shortages, and bed shortages due to a lack of social care for discharged patients were contributing to the problem. An NHS England spokesperson said: “The proportion of patients seeing their operations cancelled at the last minute remains under 1% in spite of record numbers of operations being scheduled... Our national data collection rightly requires trusts to focus on monitoring the number of last-minute cancellations, as this is where the most distress is caused for patients.” GUARDIAN

'Deeply unfair' fees of up to £900 for the poorest energy customers should be scrapped, says watchdog
When households run up a large energy bill they are unable to pay, their energy provider often installs a prepayment meter to recoup the debt over time. Households have to use the meter to pay for their energy in advance so they cannot get further into debt. Every time they top up, a proportion of the balance is also taken to help eat away at the debt. However energy companies often charge between £200 and £900 to install the meters, including other costs. These sometimes include up to £17 to send the indebted customer a letter. Ofgem today called for a cap of between £100 and £150 on the amount energy customers have to pay, as well as a blanket ban on these fees for the most vulnerable energy customers. If a household does not pay up an energy debt, the supplier can apply for a court order to fit a prepayment meter, even if it's against their will. This is generally done as a last resort when a resolution can't be found to repay the debt. But providers often charge 'warrant costs' to customers for the installation. This can include fees for administration and locksmith charges if firms need access to a property, and can be as much as £900, according to Ofgem. In 2015, the average amount charged was £400 per installation, which includes costs such as court fees, and 86,000 meters were installed under warrant. But as the customers having meters installed under warrant are already struggling to afford their energy bills, the extra fees are likely to push them into even more debt. The watchdog says of those currently with a prepayment meter, around eight per cent of gas and six per cent of electricity customers are in debt to their energy supplier. Ofgem says the fees should be wiped out for the most vulnerable customers such as those in financial hardship, those with physical and mental health issues and those with learning disabilities. Following the Competitions and Markets Authority investigation into the energy market, the amount prepayment customers pay will be cut by around £75 per customer from April 2017. This temporary price cap for the four millions households on prepayment meters will be introduced until all homes can be fitted with smart meters by 2019. This cap was bought in because the cheapest tariffs for those customers are currently £260 to £320 more expensive than for those with a standard meter. DAILY MAIL

Executive pay to be investigated by MPs
MPs have launched an inquiry into corporate governance, focusing on executive pay, worker representation in the boardroom and the lack of women in senior positions. The Business, Innovation and Skills Committee has recently held inquiries into BHS and Sports Direct. The investment arm of insurer Legal and General has also warned Britain's top companies to curb executive pay. It said that significant shareholder opposition "should not be ignored". Companies should take note if more than 20% of shareholders voted against a pay deal, Legal and General said. It comes after the Prime Minister recently pledged to overhaul the way businesses are run. BP, WPP and Smith and Nephew have been among the big companies where investors have revolted against boardroom pay. In April, 59% of BP shareholders voted against a 20% pay rise for chief executive Bob Dudley, worth £14m. However, that vote was not binding and Mr Dudley received the rise despite BP's falling profits. In 2013, amid growing investor unhappiness over excessive pay, the government gave shareholders a binding vote every three years on a firm's pay policy. At BP, the next binding vote is in 2017. MPs will look at the factors which have led to a steep rise in executive pay over the past 30 years in comparison with the salaries of more junior employees. Mr Wright said: "We on the committee are also keen to explore the issue of ever growing pay increases to executives, especially when there often seems to be very little connection with company performance or any pay rises to the vast majority of employees. The High Pay Centre thinktank released a study in August which showed that on average chief executives were paid 140 times more than their employees. Prime Minister Theresa May has said she wants shareholders to have the power to veto executive pay every year, and wants companies to publish figures showing the difference between the average worker's salary and that of the chief executive. She also wants employees to sit on the committee that oversees how much bosses are paid. Last week, Sports Direct said it would put work representatives on the board after it came under fire for its treatment of its workers at its troubled Shirebrook warehouse. BBC NEWS

Volkswagens produce double the legal emissions limit a year after dieselgate - but it's the cleanest carmaker of them all
Sunday marked the 12 month anniversary since 'dieselgate' first erupted: when United States Environmental Protection Agency revealed that some Volkswagen diesel models were fitted with defeat devices specifically aimed at cheating emissions tests. But one year on from the biggest automotive scandal in modern times, Volkswagen has been found to be selling the least polluting cars of any vehicle manufacturer. Transport & Environment found that VW models currently being sold new in dealerships still emitted double the Euro6 nitrogen oxides (NOx) requirement - but that's cleaner than any other carmaker. The findings were published on Monday as part of the motoring environmental agency's report Dieselgate: Who? What? How?, which also found that not one single mainstream car brand complies with the current Euro 6 air pollution limits for diesel cars and vans in real-world driving. Tests were conducted on around 230 diesel models in total. Data was taken from investigations conducted by the British, French and German governments, as well as a large public database, all of which were based on real-world on-road figures rather than laboratory measurements. Fiat and Suzuki diesel cars were found to be the dirtiest of all, on average polluting 15 times more than the legal NOx limit determined by Euro 6 standards. Renault and Nissan vehicles exceed the limit more than 14 times, Vauxhalls were found to pollute 10 times more the restriction while Volkswagen diesel cars polluted twice as much as the Euro 6 target. The motoring group said the results of the emissions tests shone light on the 'scandalous cover up' within the automotive sector and called for action to clean-up tailpipe pollutants of vehicles in Europe. Greg Archer, clean vehicles director at T&E, said: 'The true scandal of Dieselgate in Europe is national regulators turning a blind eye to the glaring evidence of test cheating with the sole purpose of protecting their national carmakers or their own business.' Despite committing to rectifying all 1.2 million UK diesel models affected by the scandal by the end of 2016, VW has admitted it has only managed to fix 10 per cent of all impacted cars so far. DAILY MAIL

Apple pays £89m tax fine for underreporting income in Japan
Apple has been ordered to pay about 12bn yen (£89m) in taxes for improperly reporting income associated with its Japan iTunes unit, according to reports. The news comes weeks after the EU hit Apple with a record £11bn tax penalty, ruling its 25-year “sweetheart deal” with Ireland was illegal. Apple’s unit in question has reportedly paid the amount that was asked by the Tokyo Regional Taxation Bureau. The tax authority argued that the iTunes unit, which sends parts of its profits earned from fees paid by Japanese subscribers to another Apple unit based in Ireland, had not been paying a withholding tax on these earnings in Japan, according to local broadcaster NHK. It was not immediately clear when the bureau issued the penalty or when Apple agreed to pay it, and the tech giant did not respond to a request for comment. The EU has been a strong critic of multinational companies such as Apple, Starbucks and Fiat Chrysler that have benefited from keeping their money overseas. The move allows these companies to avoid paying hefty taxes they could face by bringing the money back to the US. European Commissioner Margrethe Vestager, in charge of competition policy said that EU member states cannot give tax benefits to selected companies, after Apple was ruled to pay £11bn in tax to Ireland last month. “This is illegal under EU state aid rules. The commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” she said. “In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.” Tim Cook, Apple’s chief executive, said the Ireland tax ruling was “total political crap” and “maddening”. INDEPENDENT

Rising London house prices spark departure of thirtysomethings
Analysis by the group Generation Rent showed that 65,890 people in their 30s moved from London to another part of the UK in 2014-15, a net loss of 30,410 in that age group. This was 48% higher than in 2011-12, when 20,590 more 30 to 39-year-olds moved out than moved in. Internal migration data from the Office for National Statistics also showed a sharp increase in the number of children leaving the capital. In 2014-15, 26,920 more children under 10 moved out of London than came in, compared with a difference of 19,980 three years previously. Generation Rent said the exodus had taken place during a period in which house prices in London rose by 37%, compared with 16% in the UK as a whole, and rents increased by 10%, compared with 4% outside London. It said almost two-thirds of people moving out of London had gone elsewhere in the south-east and the east of England commuter belt, while 12% had moved to the Midlands and 11% to the north of England. Only among twentysomethings are more people moving into London than out; in 2014-15, there were 37,950 more people in this age group living in the capital than the year before, a 3% increase. Research by Lloyds bank found that moving to somewhere an hour’s commute from London could mean paying hundreds of thousands of pounds less for a family home. While the average price of a home in London transport zones one and two was £741,919, in Wellingborough, Northamptonshire, the average was £183,345, while in Peterborough, it was £189,319, Lloyds said. GUARDIAN

Tuesday, 20 September 2016

Tuesday, September 20, 2016 Posted by Hari No comments Labels: , , ,

SOURCE BBC NEWS: Apple should give Ireland 13bn euros in unpaid taxes, European Commission rules
After a three-year investigation, the European Commission has concluded that the US firm's Irish tax benefits are illegal. The Commission said Ireland enabled the company to pay substantially less than other businesses, in effect paying a corporate tax rate of no more than 1%. Ireland and Apple both said they disagreed with the record penalty and would appeal against it. The standard rate of Irish corporate tax is 12.5%. The Commissions's investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003 and about 0.005% in 2014. The company said: "Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned." The record tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year. The US Treasury, which said last week that the European Commission was in danger of becoming a "supranational tax authority", said the latest ruling could "undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU". In Apple's case, 90% of its foreign profits are legally channelled to Ireland, and then to subsidiaries which have no tax residence. At the same time, countries can scarcely afford not to co-operate when Apple comes calling; it has a stock market value of $600bn, and the attraction of the jobs it can create and the extra inward investment its favours can bring are too much for most politicians to resist.


Tax relief costs £30bn a year and goes overwhelmingly to those who need it least

How to avoid Inheritance Tax. Easy. If you're rich, that is

Office for National Statistics reports show Tory party claims of lowering personal taxes are an illusion. Personal taxes have actually increased since 2010!

Taxes up! Public spending up! Government borrowing up! No, these aren't Corbyn's future plans. They are Osborne's 2015 budget pledges

In numbers (+ a cool animation): The trillions in global tax evasion and money laundering

Corporate scroungers: How about forcing employers to publish how much welfare top-ups their low paid staff depend on

Graphs at a glance: Budget 2014 document shows we’re growing through borrowing. Again. That's why Britain needs a pay rise

Who needs fat cat pay? The Germans don't. See the comparison with the UK

The incomes of the bottom 90% have hardly risen in 20 years, whilst the top 1%’s has doubled

Thursday, 15 September 2016

Thursday, September 15, 2016 Posted by Hari No comments Labels:
Bank of England to buy “tax dodging” Apple debt to encourage it to invest here
In the Bank of England’s latest attempt to stimulate the economy, it announced a list of 100 companies, including Apple, whose debt it will start hoovering up with £10bn of freshly printed sterling. The hope is that this will ultimately spur investment and provide a boost for the wider economy, which has been hit by uncertainty surrounding the Brexit vote. For the first time, the BoE is targeting its stimulus package at overseas firms, including McDonalds, France’s state-owned electricity firm, EDF and German car-maker, Daimler, which owns Mercedes. UK-based companies including Vodafone and BP are also featured. However, several experts have pointed out that the Bank cannot track where the money goes, meaning there is no guarantee that the companies actually invest extra money at all. The Bank said it included companies that made “a material contribution to economic activity in the UK,” which included those, “with significant employment in the UK or with their headquarters in the UK”. This is not the first time the Bank has turned on the printing presses to buy up company debt; it did so at the height of the financial crisis in 2009, but the majority of previous rounds of so-called quantitative easing have focused on purchasing government bonds. This is the first time the Bank has extended QE to non-UK firms. Some economists have questioned whether previous monetary stimulus has benefited the whole economy or simply served to artificially inflate asset prices. Apple is particularly controversial. In August the European Commission ordered the California technology giant, the most valuable publicly traded company in the world, to pay €13bn (£11bn) in back taxes to Ireland over a “sweetheart” deal which, the Commission claims, allowed Apple to pay just 0.001 per cent tax on its sales in some years. INDEPENDENT

Number of workers on zero-hours contracts rockets by 20% in one year to hit nearly a million as pressure grows on Theresa May to tackle job insecurity
A record 903,000 people reported they are now working on the controversial contracts - which do not guarantee a minimum number of hours - an increase of 156,000 since last year. Nearly 3 per cent of the UK workforce are not guaranteed a minimum number of hours, the Office for National Statistics (ONS) figures show, increasing pressure on Theresa May to meet her pledge of tackling job insecurity. Women make up 55 per cent of those on zero-hours contracts, while one in five of those on the contracts is in full-time education. The majority of workers on zero-hours contracts are young, part-time or in full-time education. The average number of hours worked by people on the contracts is 25 hours a week, with around a third saying they want more hours. Campaigners said today's latest estimates found in the ONS' Labour Market Survey, shows zero-hours contracts have moved well beyond the student job market, with half of the latest increase aged 25 and over. The Business department said Government legislation had stopped firms banning workers on zero-hours contracts from working elsewhere, but added that seven in ten workers on the flexible working arrangements were happy with the number of hours they work. DAILY MAIL

UK domestic policies dented middle incomes, not globalisation, says Resolution Foundation
The Resolution Foundation said welfare cuts and housing costs were largely to blame for the dwindling fortunes of the lower middle classes during certain periods in the two decades before the 2008 financial crisis. The thinktank said too much weight has been given to the idea that an acceleration of global trade between 1988 and 2008 and the swelling middle classes in China dented the fortunes of lower middle income households in richer countries. Resolution said: “Domestic policy is central to determining working people’s living standards even in a globalised world. Changes to trade policy, even where desirable, are not a substitute for progressive taxes and benefits, fair wage policies and sufficient housebuilding.” In an analysis of the 20 years to 2008, it found that stagnating or declining incomes in the UK could often be explained by “identifiable factors such as rising housing costs, welfare policy and economic shocks – suggesting that global forces are only one part of the story”. The thinktank claims that the so-called “elephant curve”, which suggests very strong income growth for the global middle class in emerging markets such as China, and near-stagnation for the lower middle classes in rich countries, is misleading. GUARDIAN

Barclays cover-up as boss hid report exposing greed culture
Andrew Tinney, former chief operating officer of Barclays Wealth, is accused of hiding a 'highly critical' dossier after it was delivered to his £5million mansion. The Financial Conduct Authority is now seeking to have the 51-year-old banned from senior roles. Tinney, who now works for a Cypriot videogame company, is challenging the decision. The claims date from 2012 when he was asked to oversee a clean-up at Barclays Wealth Americas. He commissioned the consultancy Genesis Ventures to produce a report into the division. The study claimed BWA was pursuing a 'revenue-at-all-costs' strategy, presiding over a 'broken culture' in which the business was allowed to spin 'out of control'. One banker questioned by the investigators said that when he reported concerns over potential rule-breaking, he was told: 'I don't have time for this bull****.'  Another said that when their team presented a risk report, a boss threw it across the room saying: 'This is a piece of s***.' It is claimed Tinney was so horrified by the contents he shredded the only hard copy when it was motorbiked to the Surrey home he shared with his wife and children. The FCA report says he discussed the study with his manager, the chief executive of wealth. They agreed to act on it to improve behaviour of the staff – but decided that its contents should not be seen by anyone else. Later that year, however, Barclays was rocked by the Libor scandal, in which traders conspired to rig interest rates. It led to the resignation of chief executive Bob Diamond – once branded the 'unacceptable face' of banking over his pay – and saw the bank hit with penalties of £290million. Tinney was asked about the issue, the FCA claims, and denied the report existed. When one of the bank's lawyers asked Genesis Ventures for a copy, Tinney is alleged to have told them not to release it. Months later, the Federal Reserve Bank of New York asked for a copy of the report. When the bank finally got its hands on the study directly from Genesis Ventures, Tinney was suspended. DAILY MAIL

"Reign of terror" tax credits firm Concentrix will not have contract renewed
Concentrix, the US firm accused of incorrectly withdrawing tax credits from hundreds of claimants, will not have its contract renewed, HMRC says. Concentrix won a £75m contract to try to save the government more than £1bn in incorrect or fraudulent tax credit payments in May last year. Labour MP and chairman of the Commons Work and Pensions Committee Frank Field, who had urged the government to investigate concerns over Concentrix, welcomed HMRC's decision, saying the firm's "reign of terror" was coming to a close. The BBC earlier reported the case of Nicola McKenzie, a teenage mother who had her child tax credits stopped after she was wrongly accused of being married to a 74-year-old dead man. The Treasury has revealed 120 cases since last October where Concentrix did not "fully" meet the performance standards laid out in its contract. But it is feared the actual number may be higher. The Facebook campaign group Concentrix Mums, which has 5,600 members, says hundreds more people have been affected by errors. Tax credits - the Child Tax Credit and the Working Tax Credit - are government payments made to households on low incomes. Concentrix's government contract is based on a payment-by-results model, with the "maximisation of revenue flows" as one of its key requirements - meaning it makes more money if it cuts more payments. BBC NEWS

Greene King to move remaining pub workers off zero-hours contracts
The Suffolk-based company said it was in the process of moving workers to contracts that guarantee a minimum number of hours, following its takeover of the Spirit Pub Company last year. In 2013, Spirit, the owner of chains including Chef & Brewer and Wacky Warehouse, said that most of its 16,000 employees were on the contracts, which give no guarantee of work from one day to the next. The hospitality industry is the biggest user of such contracts, which have been criticised by unions for not offering workers any security over pay. Greene King, which had already moved its staff from zero-hours contracts before buying Spirit in 2015, said it was working on moving employees to new minimum hours contracts. A spokesman said: “We do not have zero-hours contracts in Greene King pubs. Following criticism of its employment practices, Sports Direct said it would offer 18,000 workers at its shops contracts guaranteeing at least 12 hours’ work a week, although it has emerged that this change could take until the end of the year. On Sunday, pub firm JD Wetherspoon said that it would allow 24,000 staff to choose between a zero-hours contract and one offering fixed hours after a successful trial of the scheme. Its chairman, Tim Martin, told Buzzfeed that around two-thirds of staff had opted to move off zero hours and on to guaranteed contracts, guaranteeing around 70% of the typical number of hours they work each week. GUARDIAN

Watchdog to probe banks and building societies as some punished savers but failed to help borrowers after BoE rate cut
Financial institutions including First Direct, which is owned by HSBC, and Scottish Widows, part of Lloyds, seized on last month’s rate cut to a historic 0.25 per cent low to roll back interest rates on their leading savings deals. But – despite warnings from Bank governor Mark Carney – they have not yet reduced borrowing costs for their mortgage customers. Banks make money by lending savers’ cash out to people who take on debt. Some of the profit from interest is passed on to savers and the bank keeps the rest. When savings rates are cut but borrowers’ interest rates stay the same, it means a larger profit is typically going to the bank. Scottish Widows Bank has also cut savings rate without reducing its standard variable rate for mortgages. But a spokesman said its SVR would be reduced from 3.99 per cent to 3.74 per cent on October 1. A string of building societies are also dragging their feet. They include West Bromwich, the seventh largest, which has cut some savings rates by between 0.15 and 0.2 points. A spokesman said it last reduced SVR rates in August 2014, from 5.84 per cent to 3.99 per cent. ‘Our SVR still remains competitive today, even after any recent reductions from other lenders have been applied,’ he said. An FCA spokesman said: ‘We will be writing to all mortgage providers to understand how decisions on the standard variable rate for new and existing mortgage customers have been made in response to the change in the base rate.’ DAILY MAIL

Thursday, 1 September 2016

Thursday, September 01, 2016 Posted by Hari No comments Labels:
'TTIP is dead': French President casts doubt on EU-US trade deal
Negotiators have been locked in TTIP talks since 2013 and had hoped to reach a conclusion by the end of this year. However, the talks have made slow progress, with objections on both sides of the Atlantic. Matthias Fekl, France's minister of foreign trade, said the country would formally call for an end to talks when ministers meet in Slovakia next month. "These negotiations are dead and France wants an end to them," he told French radio. "There is no political support in France for these negotiations." French President Francois Hollande said France would not accept a deal in its current form. Sigmar Gabriel, Germany's vice Chancellor, said this weekend that TTIP talks had "de facto failed, even though nobody is really admitting it... We Europeans of course must not succumb to American demands," he added. "Nothing is moving forward.” US presidential candidate Donald Trump has promoted protectionist trade policies, while rival Hillary Clinton has also cast doubt on a TTIP deal. Many claim that TTIP, a free trade agreement being negotiated between the European Union and the United States, will have far-reaching negative impacts in Europe on jobs, the environment and the economy. TELEGRAPH

Neil Woodford scraps "largely ineffective" bonus pay at his investment firm
The move at Neil Woodford's fund management business runs counter to conventional wisdom in the City that bonuses are needed to motivate staff. His firm's 35 staff will get a rise in basic pay and benefits as compensation. Craig Newman, chief executive and co-founder of Woodford Investment Management, said in statement: "There is little correlation between bonus and performance and this is backed by widespread academic evidence. Many studies conclude that bonuses don't work as a motivator, as expectation is already built in. Behavioural studies also suggest that bonuses can lead to short-term decision making and wrong behaviours." To back up the claim that bonuses are ineffective or damaging, the statement from Mr Woodford's firm points to several academic studies, and quotes from an article in the specialist publication The Journal of Corporation Law. This said: "Financial incentives are often counterproductive as they encourage gaming, fraud and other dysfunctional behaviours that damage the reputation and culture of the organisation... They produce the misleading assumption that most people are selfish and self-interested, which in turn erodes trust." BBC NEWS

Fuel economy: just two cars deliver advertised mileage
Just two cars deliver their advertised fuel economy when on the road, with the thousands of other models 30% worse on average in the real world, according to comprehensive new data. Some cars, such as the Fiat 500 and Ford Fiesta, gave barely half the mileage advertised. The result is that drivers are being misled and paying far more to drive, say experts, who warn that a stricter official test coming in 2017 will only close about half the gap between official and real fuel efficiency. The data from leading testing company Emissions Analytics covers 60,000 models and was published on Thursday, the first such database available to the public. It uses onboard equipment to measure mileage over four hours of real-world driving. In contrast, the official regulatory test is a gentle lab-based exercise. The worst gap between official miles per gallon (MPG) and real-world performance was for the Fiat 500, which is rated at 70.6MPG, but only delivered 39MPG on the road, a 45% drop. Other popular petrol cars performing at least 40% worse on the road include the UK’s most popular car, the Ford Fiesta, as well as the Ford Focus, Toyota Yaris and Mini Hatch. Some diesels, which generally have better fuel efficiency, also had 40% gaps, such as the VW Golf and Peugeot 308. The only cars to produce better fuel efficiency on the road were the 4.7-litre engine Aston Martin Vantage, which gave 21.5MPG in the real world, 5% higher than in the lab, and the 3.7l Nissan 370Z, which was 1% better on the road at 26.6MPG. The best on-the-road mileage was produced by the Honda Civic, which did 61.8MPG in the real world, though this was still 21% lower than its official mileage of 78.5MPG. The Citroen C3 was next best, with 60.3MPG, 28% lower than its official rating. The worst actual fuel economy came from the BMW X5, with just 16.2MPG, the Range Rover Sport (17.5MPG) and the Porsche Cayenne (17.8MPG), all well below official ratings. Julia Poliscanova, clean vehicles manager at campaign group Transport & Environment, said: “The fuel consumption gap has become a vast chasm. Carmakers’ manipulation of the weak, outdated lab test is widespread, affecting diesel and petrol cars. This means a total waste of motorists’ money and an increase in global warming emissions.” GUARDIAN

EU staff petition attacks ex-EU President Barroso over Goldman Sachs job
More than 75,000 people have signed an EU staff petition calling on former European commission president José Manuel Barroso to forfeit his pension for bringing the European Union into disrepute by joining Goldman Sachs. The petition, organised by a small group of EU officials, accuses Barroso of “irresponsible” and “morally reprehensible behaviour” for joining the American investment bank. Although Barroso is not the first former ex-commissioner to join Goldman, his appointment has sparked anger among rank-and-file staff, who have highlighted the bank’s role in mis-selling sub-prime mortgages, as well as lending money to the Greek government before the country’s debt disaster exploded. In a scathing denunciation of their former boss, the officials describe the Goldman job as “a disastrous symbol” for the EU and “a gift horse for europhobes”. “It is a further example of the irresponsible revolving-door practices, which are highly damaging to the EU institutions and, even if not illegal, morally reprehensible.” Ex-European commissioners must inform the EU executive of any new position for up to 18 months after they step down. Barroso took up the post at Goldman Sachs 20 months after leaving the commission. A Goldman Sachs spokesman said: “José Manuel’s experience and advice in this time of uncertainty will be extremely valuable to our clients and their reaction to his appointment at Goldman Sachs has been very encouraging.” The bank also defended its Greek currency swaps “as entirely legitimate debt management transactions” that were in line with EU rules. GUARDIAN

Apple should give Ireland 13bn euros in unpaid taxes, European Commission rules
After a three-year investigation, the European Commission has concluded that the US firm's Irish tax benefits are illegal. The Commission said Ireland enabled the company to pay substantially less than other businesses, in effect paying a corporate tax rate of no more than 1%. Ireland and Apple both said they disagreed with the record penalty and would appeal against it. The standard rate of Irish corporate tax is 12.5%. The Commissions's investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003 and about 0.005% in 2014. The company said: "Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned." The record tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year. The US Treasury, which said last week that the European Commission was in danger of becoming a "supranational tax authority", said the latest ruling could "undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU". In Apple's case, 90% of its foreign profits are legally channelled to Ireland, and then to subsidiaries which have no tax residence. At the same time, countries can scarcely afford not to co-operate when Apple comes calling; it has a stock market value of $600bn, and the attraction of the jobs it can create and the extra inward investment its favours can bring are too much for most politicians to resist. BBC NEWS

'Property is better bet' than a pension says Bank of England economist
Haldane believes that property is a better bet for retirement planning than a pension. “It ought to be pension but it’s almost certainly property,” he said, adding: “As long as we continue not to build anything like as many houses in this country as we need to ... we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.” This is not the first time the Bank of England’s chief economist, Andy Haldane, has raised eyebrows with his comments on pensions. In a speech in May, he admitted that he was unable to understand pensions because the system was so complicated.  “I consider myself moderately financially literate – yet I confess to not being able to make the remotest sense of pensions,” he said. “Conversations with countless experts and independent financial advisers have confirmed for me only one thing – that they have no clue either.” Haldane owns two homes – one in Surrey and a holiday home on the Kent coast. His basic salary at the Bank is £182,000 and he is in line for a pension of more than £80,000 a year when he retires. GUARDIAN

PricewaterhouseCoopers fined more than £3m for failing to spot black hole at collapsed payday lender
PricewaterhouseCoopers signed off accounts showing the now defunct FTSE 250 company made annual profits of £165.2m in 2007. But it later emerged PwC had failed to spot a deep hole in the books – and the company in fact made a loss of £96.5m that year. Cattles shares collapsed and eventually were suspended – leaving investors previously unaware of the situation nursing heavy losses. The Financial Reporting Council, the accountancy watchdog, yesterday fined PwC £2.3m and ordered it to pay £750,000 of legal fees. The watchdog also fined PwC partner Simon Bradburn £75,600 and issued him and his firm with a ‘severe reprimand’ – saying their conduct ‘fell significantly short of the standards reasonably to be expected of them’. In February 2009, Cattles announced that publication of its 2008 accounts would be delayed, sending its shares down 74 per cent in just one day, and in the following months Cattles said it was in breach of its banking agreements. Trading in its shares was suspended and PwC resigned as auditors. Two Cattles directors were banned from the City in 2012 for misleading investors about the quality of the company’s loans book. The FRC accepted that PwC and Bradburn were ‘deliberately misled’ by the company, but said they ‘failed to exercise sufficient professional scepticism’. DAILY MAIL

Thursday, 18 August 2016

Thursday, August 18, 2016 Posted by Hari No comments Labels:
Inheritance tax, and how the Dukes of Westminster avoid it on their £9bn fortune
Clever use of trust structures enable the Grosvenor family - whose head is the Duke of Westminster - to pass assets down the generations without attracting inheritance tax, accountants say. The Grosvenors' property fortune is estimated at £9bn. Yet the death of Gerald Cavendish Grosvenor, the sixth Duke of Westminster, and the inheritance of his title by his son Hugh, is not expected to trigger vast death duties. This is because successive generations are "trustees" rather than direct owners of the assets. According to the Grosvenor Estate's own description of its structure, the six trustees (of whom the late Duke was chairman) "hold the assets of the group for the benefit of current and future members of the Grosvenor family". Income and other benefits can be paid out to beneficiaries, who may or may not include the trustees, and who will be taxed on them as normal. Peter Legg, a chartered tax adviser and founder of IHT Planning Matters, said: "Here it would appear that shares in the businesses are owned by family members as trustees, not as individuals." This puts the assets at arms' length and effectively eludes death duties. The Grosvenor property empire includes swathes of London's most prestigious streets and squares, in Mayfair, Belgravia and Chelsea. TELEGRAPH

Takeaway firm Deliveroo abandons plan to force ‘absurd’ new contract for staff
Deliveroo riders have been celebrating after the company confirmed it would not force them to sign new contracts agreeing to a trial pay scheme that could see them earn barely half the National Living Wage. The takeaway firm offered concessions in its pay dispute with workers after staff staged a protest and politicians waded into the row. Deliveroo confirmed it will allow riders to work under their previous pay agreements instead of participating in a trial pay scheme, which pays  £3.75 per delivery rather than the current terms of £7 an hour and £1 per delivery. Riders who have already signed the new contract terms will no longer be bound by it, the union said. The new voluntary trial scheme is due to start on Wednesday. Employees who participated in the six-day strike were also told that there would be no threats of job losses or other victimisation against workers who demanded a guaranteed hourly wage, according to the Independent Workers Union of Great Britain (IWGB). “This strike has exposed Deliveroo and their disingenuous methods for what they really are. A week ago Deliveroo were forcing us to sign a new contract under the immediate threat of losing our jobs, and on the false pretence it was a trial," Tom Hobbert, a Deliveroo courier who took part in the strike, said. Final decision on pay will be taken at the end of the trial scheme on 14 September. At this stage 280 of the 3,000 Deliveroo riders in London are participating in the trial. On Sunday, the Department for Business, Energy and Industrial Strategy insisted Deliveroo employees must be paid the national living wage of £7.20 an hour unless a court or HM Revenue and Customs defines them as self-employed. The National Living Wage of £7.20 for everyone aged over 25 years old – hailed as the new minimum wage – was announced by the former Chancellor George Osborne in April this year. Yet nearly 200 employers have been recently named and shamed for failing to pay that minimum wage to their workers. INDEPENDENT

Tax avoidance: Accountants face tougher penalties
Accountants or advisers who help people bend the rules to gain a tax advantage never intended face tougher fines under new penalties proposed by the Treasury. A fine of up to 100% of the tax that was avoided - including via off-shore havens - has been suggested in the new rules, published for consultation. Currently those who advise on tax face little risk, while their clients face penalties only if they lose in court. The rules would "root out" tax avoidance at source, the Treasury said. The avoidance it's trying to root out involves bending the rules to gain a tax advantage that Parliament never intended, an abuse which costs nearly £3bn a year. The new rules come after the government set up a new task force to investigate allegations of tax-dodging and money laundering in light of the Panama Papers leak, which lifted the lid on how the rich and powerful use tax havens to hide their wealth. Following the Panama Papers scandal the five largest economies in the European Union, the UK, Germany, France, Italy and Spain, agreed to share information on secret owners of businesses and trusts. Richard Murphy, a chartered accountant and academic at City University, told the BBC it was unlikely that cases would come to court, but that the threat of fines would act as an "amazing deterrent" to advisers which would prevent them offering advice on tax avoidance. He said this was partly because it could put at risk their ability to get professional indemnity insurance, which they need to continue their work. "Lawyers and accountants will not take the risk of selling these schemes," he said. "There's a risk of a 100% fine so they'll think they can't afford to do it. Every honest accountant will be jumping for joy this morning that those who have been selling these schemes will be put out of practice." He said that the tax system loses around £10bn per year as a result of tax avoidance, well above the £3bn a year the Treasury says is lost. BBC NEWS

Sports Direct warehouse workers to receive back pay
Thousands of Sports Direct warehouse workers are set to receive back pay totalling about £1m after the retailer admitted breaking the law by not paying the national minimum wage. The sportswear chain and its employment agencies are also facing fines of up to £2m imposed by the Department for Business, Energy and Industrial Strategy (BEIS) after they were found to have been underpaying some of the country’s lowest-paid workers for four years. The move, which follows an undercover Guardian investigation last year that exposed how Sports Direct workers were being paid less than the legal minimum, is to include payments backdated to May 2012 and could be worth up to £1,000 for some workers, trade union officials estimate. The agreement, which is understood to have been struck between the union Unite, the retailer and HM Revenue & Customs, includes about 200 workers directly employed by Sports Direct and around 3,000 staff hired through temporary employment agencies. Two agencies, The Best Connection and Transline, provide most of the labour in the company’s warehouse in Shirebrook, Derbyshire. Those familiar with the deal, however, say that 1,700 Transline agency workers may initially receive just half the back pay they are owed when payments begin from the end of the month. This is because the agency is refusing to refund unpaid wages from before it took over contracts from a rival agency, Blue Arrow, two years ago. Steve Turner, Unite’s assistant general secretary, said: “Investors and customers alike should not be fooled into thinking that everything is now rosy at Sports Direct’s Shirebrook warehouse. Transline, one of the employment agencies involved, is disgracefully still trying to short-change workers by seeking to duck its responsibilities.” GUARDIAN

Two in three families are left stuck on high energy bills after energy watchdog let power giants off over £2bn rip-off
After a two-year investigation, Ofgem announced a crackdown that was supposed to tackle power firms’ poor treatment of loyal customers. But the reforms, all of which were suggested by the powerful Competitions and Markets Authority (CMA), will only curb high prices for four million customers with prepayment meters, who will see their costs fall by around £75 a year from next April. Britain’s remaining 24 million households were instead told they would benefit from a range of measures to boost competition between suppliers. Yet energy experts said the new rules would only make matters worse. They said that one of the proposals - giving firms access to a database of households who don’t switch deals - would only lead to customers being bombarded with junk mail. And they warned that households were in danger of being baffled by hundreds of new offers under plans to remove a ban on each supplier offering more than four tariffs. Price comparison websites are also expected to be given the green light to push customers towards some deals, while hiding others that earn the site less in commission. According to the report, 66 per cent of households are on their supplier’s most expensive deal and overpay by as much as £300 a year. DAILY MAIL

Brexit bazooka: Bank of England cuts interest rates to record low of 0.25% and puts £170bn behind emergency cash for financial system
The Bank of England cut interest rates for the first time in more than seven years to 0.25 per cent today - and delivered another £60billion of quantitative easing, a funding scheme that could amount to £100billion and £10billion of corporate bond buying. The widely-expected rate cut was voted for unanimously by the monetary policy committee and will deliver a boost to borrowers through cheaper mortgages and loans but hit savers who are already suffering from historically low rates. Christopher Metcalfe, investment leader, UK Equities, Newton Investment Management, warned: 'The price of credit for firms is already low and it is difficult to imagine if businesses are scared or unwilling to invest in the wake of Brexit at 0.5% interest, whether a further to 0.25% will induce them to invest.' Policymakers also decided to pump extra money into the economy through the Bank's government bond-buying quantitative easing programme, now totalling £425bn, and also buy up to £10billion of UK corporate bonds. A new Funding for Lending style scheme worth up to £100billion was also announced. DAILY MAIL

Watchdog's banking tech reform 'not enough'
A shake-up in UK retail banking has been criticised by consumer groups and economists as not going far enough. The Competition and Markets Authority (CMA) concluded that new phone-based apps could show customers which banks may offer the best account. Banks will also have to set maximum monthly fees for unarranged overdrafts. The CMA decided against a cross-industry cap, leaving individual banks to set their own charges. Alex Neill, director of policy and campaigns at Which?, said: "It is disappointing that the monthly charge cap is not actually a cap and banks will be allowed to continue to charge exorbitant fees for so-called unauthorised overdrafts, rather than protect those customers that have been identified as among the most vulnerable." Andrew Tyrie MP, chairman of the Treasury Select Committee, said: "The CMA is relying on the rolling out of new technology to do the heavy lifting on competition. But many customers will not have the tools or skills to do this. Customers are also - understandably - wary of the data-sharing required for this to be effective." Diane Coyle , Professor of Economics at the University of Manchester, questioned whether the new measures would increase the rate of switching. "There's a lot of reliance being placed on more information, but consumers will need to give all of their transaction information to third-part providers, and there's the trust question ... do you really want another party to be able to see all the transactions that you make in your bank account and be able to tell other potential competitors about that?" she told the BBC. BBC NEWS

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