Tuesday, 10 January 2017

Tuesday, January 10, 2017 Posted by Hari No comments Labels: , , , , , , , , ,
KJ and Fee celebrate Theresa May's Tory u-turn, for the moment...
For we know what happens when mainstream, centre-ground politics fails. People embrace the fringe – the politics of division and despair. They turn to those who offer easy answers – who claim to understand people’s problems and always know what – and who – to blame. We see those fringe voices gaining prominence in some countries across Europe today – voices from the hard-left and the far-right stepping forward and sensing that this is their time. But they stand on the shoulders of mainstream politicians who have allowed unfairness and division to grow by ignoring the legitimate concerns of ordinary people for too long. Politicians who embraced the twin pillars of liberalism and globalisation as the great forces for good that they are, but failed to understand that for too many people – particularly those on modest to low incomes living in rich countries like our own – those forces are something to be concerned, not thrilled, about. Politicians who supported and promoted an economic system that works well for a privileged few, but failed to ensure that the prosperity generated by free markets and free trade is shared by everyone, in every corner and community of their land.

The plans aim to make mental health an everyday concern for every bit of the system, helping ensure that no one affected by mental ill-health goes unattended. It includes... new ways to right the injustices people with mental health problems face. Despite known links between debt and mental health, currently hundreds of mental health patients are charged up to £300 by their GP for a form to prove they have mental health issues.


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

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

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

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

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

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

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

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

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

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

Saturday, 7 January 2017

Saturday, January 07, 2017 Posted by Hari No comments Labels: , , , , ,
"Fat Cat Wednesday 2017" 

Welcome back to work. FTSE100 bosses will have already clocked up an average annual UK salary just two-and-a-half days into the working year

  • Top bosses will already have made more money by the first Wednesday of 2017 than the typical UK worker will earn all year
  • The average pay ratio between FTSE100 CEOs and the average total pay of their employees in 2015 was 129:1
  • Making the publication of pay ratios compulsory will help track progress on closing this gap

It’s Fat Cat Wednesday (4.1.2017). After just two and a half days Britain’s top bosses will have made more money than the average UK worker earns in an entire year, according to High Pay Centre calculations.
The figures show that pay for top company executives returning to work this new year will pass the UK average salary of £28,200 (note 2 below) by around mid-day on “Fat Cat Wednesday”.

After a year in which “elites” were criticised for being out of touch and ignorant about the concerns of ordinary people, these pay gap figures confirm that there are dramatically different rates of pay at the top compared with what everyone else receives.
Median FTSE100 CEO pay in 2015 was £3.973 million (note 1 below). We found that even if CEOs are assumed to work long hours with very few holidays, this is equivalent to a rate of pay of over £1,000 an hour (note 3 below). The “national living wage” for over 25s is £7.20 an hour.

High Pay Centre director Stefan Stern said: “Our new year calculation is not designed to make the return to work harder than it already is. But ‘Fat Cat Wednesday’ is an important reminder of the continuing problem of the unfair pay gap in the UK. We hope the government will recognise that further reform to pay practices are needed if this gap is to be closed. That will be the main point in our submission to the business department in its current consultation over corporate governance reform.

“Reality check” needed

“Effective representation for ordinary workers on the company remuneration committees that set executive pay, and publication of the pay ratio between the highest and average earner within a company, would bring a greater sense of proportion to the setting of top pay,” Stern added.
The huge increase in top pay in recent years seems to have arisen because of so-called “performance-related pay” awards. But as new research from Lancaster University Management School has revealed, the link between pay and performance has in fact been “negligible”:

GUARDIAN: 'Negligible' link between executive pay and firm's performance
INDEPENDENT: Link between high executive pay and performance ‘negligible’
FINANCIAL TIMES: ‘Negligible’ link found between executive pay and performance

This is not just a FTSE100 company problem. AIM-listed Asos is being criticised today by the GMB union for a similar vast gap in pay created by the chief executive’s “Long Term Incentive Plan” (for more information contact

And excessive private sector pay deals set a bad example to some public sector and not-for-profit organisations, as controversy over the pay for some university vice chancellors, school “superheads”, NHS Trust chief executives, local authority leaders and some charity bosses suggests.

The continuing pay gap creates problems for us all.

1. The median pay for a FTSE 100 CEO in 2015 was £3.973 million, based on the publicly disclosed “single figure” measure (There are different ways of measuring executive pay, and the single figure measure differs from the “pay realised” figure and the pay awarded figures available from Manifest.)
2. Median earnings for full-time workers in the UK (who had been in their job for at least 12 months) were £28,200 in 2016 This represents an increase from £27,645 in 2015.
3. Even when making the generous assumption that FTSE 100 CEOs work 12 hours a day, including three out of every four weekends, and take fewer than 10 days holiday per year, this still works out at about £1,009 per hour, meaning that it would take around 28 hours’ work to surpass the UK average of £28,200 – some time around mid-day on Wednesday 4th, assuming they begin work for the year on Monday January 2nd.
4. The High Pay Centre is an independent think-tank set up to examine corporate governance and pay at the top of the income distribution. We carry out research aimed at developing a better understanding of top rewards, company accountability and business performance.

The 10 highest paid CEOs in 2015 and 2014 were as follows:

Thursday, 5 January 2017

Thursday, January 05, 2017 Posted by Hari No comments Labels:
Row over 'affordable' starter homes that will cost up to £450,000
Housing minister Gavin Barwell pledged that 2017 would see the first wave of the discounted homes built on brownfield sites in 30 local authority areas around England. But Labour and the housing charity Shelter said it was a nonsense to describe them as “affordable” when they would cost up to £450,000 each. Furthermore, Mr Barwell was unable to say how many homes would be built this year – making the original target of 200,000 by 2020 impossible, Labour said. Ministers had suggested that – under Theresa May’s leadership – the Government would refocus the starter homes project to include some properties to rent, as well as to buy. But the houses to be built this year will be made available exclusively to first-time buyers aged between 23 and 40, at a discount of at least 20 per cent below market value. That means a cap of £250,000 outside London – but a ceiling of an eye-watering £450,000 in the capital. Yet, most controversially, the starter homes will count towards the Government’s target to build 400,000 new “affordable homes”. Roger Harding, Shelter’s director of communications, said: “Efforts to build more homes are welcome, but these starter homes are only likely to benefit people who are better off and already close to buying." The first areas will begin construction later this year. INDEPENDENT

Young people with the best paid jobs also likely to inherit the most wealth
Britain’s wealth gap will be passed down the generations as well-off older people bequeath property to their already thriving offspring, according to new research from one of the UK’s leading thinktanks. The Institute for Fiscal Studies (IFS) found that today’s young people were likely to inherit more wealth than their predecessors but the benefits would be skewed to those who were already well off. The study concluded that inequality was likely to increase and social mobility hindered as pensioners bequeathed the wealth they had accumulated as a result of rising home ownership and property-price inflation. “Between 2002-03 and 2012-13, the wealth of elderly households (those in which all members are 80 or older) increased by 45%, mostly as a result of higher homeownership and rising house prices,” the IFS study said. It added that 72% of those households now expected to leave an inheritance, up from 60% a decade earlier, with a sharp increase in the proportion expecting to leave a large inheritance. Property wealth has increased and become more widely spread in recent generations. Owner-occupation rose from 30% at the end of the second world war to a peak of 70% at the turn of the millennium, while property booms in the 1970s, 1980s and 2000s have seen house prices rise by almost 300% in real terms in the half-century ending in 2010. As a result of these trends, the IFS said younger generations looked much more likely to inherit than their predecessors. Someone born in the 1930s had a 40% chance of an inheritance, rising to 61% of those born in the 1950s and 75% of those born in the 1970s. But the thinktank warned that future inheritances were set to be highly unequal given that the richest half of elderly households held 90% of the wealth and the richest 10% held 40% of the wealth. “Hence a ‘lucky half’ of younger generations look likely to get the vast majority of inherited wealth.” The largest inheritances would in the main go to those who were already well off. More than half of those likely to secure an inheritance of at least £250,000 had incomes in the top 20% of the population. Andrew Hood, from the IFS, said: “The wealth of younger generations looks set to depend more on who their parents are than was the case for older generations. Today’s elderly have much more wealth to leave to their children than their predecessors did. At the same time, today’s young adults will find it harder to accumulate wealth of their own than previous generations did, due to the sharp fall in homeownership for that group, the dramatic decline of defined benefit pensions in the private sector and the stagnation in their incomes.” GUARDIAN

Household debt rises to post-credit crunch high
Bank of England data shows personal debt grew 10.8% in the year to 30 November to £192.2bn in the UK - the highest level since December 2008. Personal debt includes credit cards and bank loans but not mortgages or student loans. Debt charity Step Change is calling on the government to adopt a scheme that gives problem debtors 12 months' breathing space to get back on track. The government says it is reviewing whether to bring in such a scheme. But that decision is now 12 months overdue, and the charity estimates that a further one million people fell into problem debt during this period. Debt counsellors say many debtors are now using credit cards to pay for essential living costs, rather than luxury items. Things are likely to get tougher for many people, with inflation expected to rise in 2017. StepChange says it has experienced the busiest period in its history, with more than 300,000 people calling it for money advice in the first six months of 2016. BBC NEWS

It's Fat Cat Wednesday! FTSE bosses have already earned the average UK wage just two-and-a-half days into the working year
The High Pay Centre has branded today Fat Cat Wednesday because of the shocking figures. It takes the average chief executive of a leading business just two-and-a-half days to earn the average salary of £28,200, said the independent body. It would take just over an hour-and-a-half for the best paid, Sir Martin Sorrell, said the centre. As boss of advertising giant WPP, a long-term bonus took his total package to £70million last year. The findings will pile pressure on Theresa May to tackle excessive pay after she criticised the ‘irrational and unhealthy’ divide between bosses and ordinary workers. Even the Institute of Directors has called for ‘corporate awareness’. It has warned that some executives have ‘assumed massive rewards while taking little of the personal risk’ usually associated with entrepreneurs. The average pay for a FTSE 100 chief executive is nearly £4million or just over £1,000 an hour, said the High Pay Centre. The centre warns that excessive pay deals in the private sector ‘set a bad example’ to the public sector and not-for-profit organisations. This is seen by the huge amounts given to some headteachers and leaders of NHS trusts, councils and charities. Simon Walker, director general at the Institute of Directors, pointed to the threat of an official clampdown. ‘Unless boards show they are listening and responding, the Government’s trigger finger will just get itchier and itchier,’ he said. ‘The problem is that over the past few decades managers have assumed massive rewards while taking little of the personal risk.’ Frances O’Grady, general secretary of the TUC, said: ‘Working people deserve a fair share of the wealth they help create. The Prime Minister must stick to her promise to tackle excessive pay at the top.’ A report from The Equality Trust today added to concerns about the pay gap. It said the average FTSE 100 chief executive earned 172 times more than a nurse, 145 times more than teacher, 137 times more than a police officer and 324 times more than a care worker in the 2015-16 financial year. DAILY MAIL

Zero-hours workers 'face £1,000 pay penalty'
Workers on zero-hours contracts typically earn £1,000 a year less than permanent employees, according to Resolution Foundation research. People on the controversial contracts face a "precarious pay penalty" of 6.6%, or 93p an hour, the think tank has estimated. For those who earn the least, the size of the gap is even greater, at 9.5%. The foundation backed the government's decision, announced last month, to hold a review into modern working practices. Laura Gardiner, senior policy analyst at the Resolution Foundation, said: "Zero-hours contracts have hit the headlines in recent months for their widespread use in Sports Direct and JD Sports. But concern about the use and abuse of zero-hours contracts goes far wider than a few notorious firms. There is mounting evidence that their use is associated with a holding down of wages. As new ways of working continue to grow - from [zero-hours contracts] and agency work to the gig economy and wider self-employment - we need a better understanding of how they help or hinder people's earnings and career prospects.” BBC NEWS

Rail fares: train operators accused of milking the system as rises kick in
Higher rail fares have come into effect, with passengers across Britain facing an average rise of 2.3%, prompting renewed outcry from campaigners. The overall rise in prices will outstrip the increase in season tickets set by the government, leading unions to accuse private train companies of milking the system. Labour party research shows that season tickets have gone up by an average of 27% since 2010, while the TUC found that rail fares had risen at more than twice the rate of inflation and wages over the last decade. According to Labour, some commuters will now payover £2,000 more to travel to work than when the Conservatives came to power in 2010. A comparison of costs on nearly 200 routes shows that the average commuter is now paying £2,788 for their season ticket, £594 more than in 2010. A Virgin Trains season ticket between Birmingham and London now costs £10,200, up £2,172 since 2010, while commuters travelling from Brighton to London on the troubled Southern Rail route now pay almost £1,000 more than in 2010, Labour’s research found. The transport secretary, Chris Grayling, defended the situation. He said: “We are delivering the biggest rail modernisation programme for more than a century, providing more seats and services. We have always fairly balanced the cost of this investment between the taxpayer and the passenger.” The TUC general secretary, Frances O’Grady, said: “British commuters are forced to shell out far more on rail fares than others in Europe. Many will look with envy at the cheaper, publicly-owned services on the continent.” GUARDIAN

HMRC empowered to name and shame tax evasion 'enablers'
Tax advisers, accountants and lawyers who aid the super-rich with offshore tax evasion will face tough new penalties from New Year’s Day, with HMRC now able to publicly name and shame “enablers”. The Treasury said the government’s new powers would see individuals or corporations who take deliberate action to help others evade paying tax facing fines of up to 100% of the tax they helped evade or £3,000, whichever is highest. The new crackdown, first announced by the then chancellor George Osborne in the 2015 budget, will mean HMRC can, for the first time, penalise the facilitators of tax evasion who help to physically move funds abroad or advise on offshore tax saving. A new corporate criminal offence of failing to prevent the facilitation of tax evasion will also be introduced this year, with companies held liable if an individual acting on their behalf as an employee or contractor facilitates tax evasion. Previous rules meant a corporate criminal prosecution was only possible if there was proof that the board of directors were aware and involved in facilitating the evasion. The Treasury said HMRC had secured more than £2.5bn specifically from offshore tax evaders since 2010. However, the department was criticised last November after its new specialist tax evasion unit only successfully pursued one criminal prosecution, despite having identified potential evasion and avoidance worth nearly £2bn after examining the tax affairs of 6,500 super-rich individuals. The Treasury said more action was planned in the coming months, including a consultation on a new requirement for businesses and individuals who create complex offshore financial arrangements that bear the hallmarks of enabling tax evasion to notify them to HMRC. May pledged during her leadership campaign that she would pursue companies and individuals who took part in deliberate tax avoidance. “It doesn’t matter to me whether you’re Amazon, Google or Starbucks: you have a duty to put something back, you have a debt to fellow citizens and you have a responsibility to pay your taxes,” she said. GUARDIAN

Aldi to become highest-paying supermarket in UK
Aldi is to give more than 3,000 staff a pay rise in an effort to leapfrog fellow German discounter Lidl to become the highest-paying supermarket in the UK. Employees at the fast-growing supermarket chain will earn £8.53 per hour and £9.75 if they live in London, starting from 1 February. While Aldi’s hourly rate in the capital will be the same as the new minimum announced in November by Lidl, staff outside London will earn 7p an hour more. Both supermarket chains have now matched or bettered the the voluntary minimum pay suggested by the Living Wage Foundation. Aldi said the increase means it is now the highest paying company in the supermarket sector, adding that 3,356 staff stood to benefit. It pointed out that it also paid staff for breaks, which it claimed Lidl did not. Aldi’s UK chief executive, Matthew Barnes, said: “We employ the best people in retail and invest in their training to enable them to carry out a range of different roles in store... We remain committed to being the best supermarket employer in Britain. This means that we will continue to provide employees with rates of pay and benefits that are the highest in the supermarket sector.” GUARDIAN

Thursday, 15 December 2016

Thursday, December 15, 2016 Posted by Hari No comments Labels:
Taxpayers foot £50m bill for Southern rail strike
Because of a deal struck with Southern by the Government, the cost of the disruption will be borne by the taxpayer. Under the seven-year deal, the Government pays Govia more than £1 billion a year to run the service. Ministers agreed to bear the financial risk of running the railway because of the significant disruption caused by the redevelopment of London Bridge station. In return, the fees that Southern collects in fares are passed to the Government. It means that during the 20 days lost to strikes this year – when there are no fares to collect – the Government must bear the cost of £38 million in lost revenue. The deal also states that the Government will pick up the tab for compensation claims likely to be filed by passengers who have paid season ticket fares but have no services to catch – an estimated £15 million. Nick Herbert, the Conservative MP for Arundel and South Downs and a former minister, said:  “Because of the way the franchise is structured, there isn’t proper accountability. It should be the company bearing the cost of compensation and failure to meet targets.” Meanwhile, Govia Thameslink Railway, the company that runs Southern, is saving an estimated £1.1 million in pay for train drivers and conductors who are out on strike this week. Govia could still be hit with financial penalties totalling tens of millions of pounds for delayed and cancelled services. However, it is claiming that disruption caused by strikes and staff sickness is a force majeure and it should therefore not have to pay the fines. TELEGRAPH

How Britain's biggest shops are pocketing YOUR delivery fee refunds on unwanted items and making up to £4.1bn
Online stores including Asos, Boohoo and Topshop routinely pocket the postage and packaging costs - often called delivery fees or charges - when customers return goods. A Money Mail investigation reveals that these online retailers could be breaking a little-known consumer law. According to the Consumer Contracts Regulations, introduced in 2014, customers who return items should get a refund for the price of the goods and the standard postage costs they paid for home delivery. Lawyers say the original delivery fee should be handed back automatically as part of any refund if the items are returned within a set period. Yet our research found many shops hold on to the cash - typically around £3 per delivery - unless you ask for it. Often your rights are buried in the smallprint on retailers’ websites. Then customers are made to jump through hoops to get the money they’re owed, such as filling in extra forms or making phone calls. For example, the press office for online clothes shop Asos, which made £1.4 billion in sales in the past financial year, says it does refund its £3 postage charge if a shopper asks. But when Money Mail contacted its customer services, an email came back saying the fees were a ‘non-refundable cost’ and made no mention of the law. Experts say most shoppers fail to claim because they are unaware of their rights or do not have time. In the UK, some 1.38 billion items were returned last year, says consultancy Clear Returns. It means shops could be sitting on £4.1 billion of postage fees. The Consumer Contracts Regulations 2014 state that if you return items bought over the phone or internet within 14 days of receiving them, you should receive a full refund. There does not have to be anything wrong with the goods: it’s enough simply to have changed your mind. The rules state that as well as a refund for the item, customers should get back their original, standard delivery costs if they return the whole order at once. DAILY MAIL

Families 'left at the mercy of fraudsters' who cost us £15bn a year after number of trading standards officers is cut by 56% since 2009
The National Audit Office (NAO) says consumer protection is suffering following massive cuts to trading standards services. Trading standards officers point to the horsemeat scandal, problems with exploding hoverboards and the fires linked to tumble dryers as evidence of what is going wrong. 'Some services now have only one qualified officer,' said the NAO. 'Despite this lack of funding, local trading standards teams are expected to enforce 263 different pieces of legislation for different government departments with little direction from government on the priority of these.' The NAO pointed to problems such as mass marketing scams, often involving bogus prize drawn, which are widespread and impact on the elderly and vulnerable. It said a typical postal scam victim, who is 74 years old and lives alone, will lose around £4,500. 'Many experience psychological problems,' said the NAO. The watchdog said e-crime is becoming a huge problem with, among other things, criminals defrauding wealthy individuals of large sums of money by selling non-existent investments. There is a problem of unsafe goods, which can cause injury and fatalities. Common recent examples include make-up that contained carcinogens, counterfeit medicines, and electrical items which caught fire when charging. And there is a burgeoning black market in counterfeit items. The NAO pointed to problems such as mass marketing scams, often involving bogus prize drawn, which are widespread and impact on the elderly and vulnerable. It said a typical postal scam victim, who is 74 years old and lives alone, will lose around £4,500. 'Many experience psychological problems,' said the NAO. The watchdog said e-crime is becoming a huge problem with, among other things, criminals defrauding wealthy individuals of large sums of money by selling non-existent investments. National audit office chief  Amyas Morse said Consumer protection bodies have shown they can make good impacts with limited resources. National audit office chief  Amyas Morse said Consumer protection bodies have shown they can make good impacts with limited resources. There is a problem of unsafe goods, which can cause injury and fatalities. Common recent examples include make-up that contained carcinogens, counterfeit medicines, and electrical items which caught fire when charging. And there is a burgeoning black market in counterfeit items. DAILY MAIL

Unpaid benefits at record level
A total of £1.7bn in benefits was not paid to those entitled to the money in 2015-16, a new record rate of underpayment. Nearly 65% of underpaid benefits - the equivalent to about £1bn a year - was the result of inaccurate information from claimants. The government said it was providing more help to claimants to provide accurate information. But David Samson, the welfare benefits project manager at the Turn2us charity, said that this support was not always easy to get. "People are finding it harder and harder to access face-to-face help with completing these forms, which is why this problem goes unnoticed. This is a particular concern for people living with a mental health problem or who have learning difficulty who may need the extra support when completing them. The latest figures showed the biggest rise in benefit underpayments was in Pension Credit, a top-up to the state pension for low-income pensioners. With this benefit, the DWP admitted that the biggest cause was official error. A year ago, the work and pensions select committee said that, while many parts of the welfare system worked well, underpayments needed a higher priority. Benefit problems "often led claimants to face difficult decisions over whether to pay their rent or provide essentials such as food, gas and electricity for their household", it concluded, with many becoming reliant on food banks as a result of underpaid benefits. Overpayments of benefits totalled £3.3bn, the equivalent of 1.9% of benefit payments, the DWP figures show. BBC NEWS

Completely fee-free basic accounts for the poor: millions are still paying fees
Basic bank accounts are designed for people who do not already have a bank account and are ineligible for a standard current account. While eight million people have basic accounts, around half of them are still liable to pay fees for failed payments. Completely fee-free basic accounts have been available since January 2016, following an industry agreement. Vulnerable customers who have such accounts are not charged for failed payments, or for going overdrawn. The Treasury figures show that 3.7 million people have accounts that do not conform to the agreement, struck between the government and the banking industry, in 2014. Of those, 3.6 million bank with Lloyds. Only 4% of those who have basic bank accounts with Lloyds have access to the cheapest banking terms, the figures show. Royal Bank of Scotland (RBS) is the only other bank where some basic account customers have to pay fees. At the other seven big High Street banks, all basic account holders receive the best deal on offer. BBC NEWS

Abandon net migration target, says CBI
The employers group, the CBI, is calling on the government to abandon an immigration target which was set by David Cameron and which then proved part of his undoing. Britain's biggest business group is attempting a very difficult balancing act. The CBI needs to acknowledge public concern over immigration while at the same time warning about looming labour shortages in key industries like agriculture, care and construction. The CBI insists that immigration has had little impact on wages, particularly in low-skilled areas. But privately, many bosses acknowledge that immigrants, who often sleep several to a room, and often leave their families back in Eastern Europe, are prepared to work for lower wages. And that depresses wages at the bottom of the pay scale. A Bank of England study found that although small, there was a "statistically significant" negative impact on wages in some unskilled occupations which had high concentrations of immigrant workers. The CBI raises some very real challenges facing UK businesses and the economy as a whole. There are serious questions about who will build Hinkley C nuclear power station, an expanded Heathrow airport, the HS2 railway project, and hundreds of thousands of new homes. An ageing population will need more carers, and turnips don't pick themselves. The government has been making some conciliatory noises. Speaking to business leaders in Cardiff, Brexit Secretary David Davis said that while freedom of movement will end in its current form, the government does not want to end up with damaging labour shortages in key areas. That raises the potential for work permits or visas to be issued on a sector-by-sector basis, as required by particular industries. BBC NEWS
Thursday, December 15, 2016 Posted by Hari No comments Labels: , , , ,
Chris and KJ realise it's Govia Southern Rail that has us over a barrel...

SOURCE TELEGRAPH: Taxpayers foot £50m bill for Southern rail strike
Because of a deal struck with Southern by the Government, the cost of the disruption will be borne by the taxpayer. Under the seven-year deal, the Government pays Govia more than £1 billion a year to run the service. Ministers agreed to bear the financial risk of running the railway because of the significant disruption caused by the redevelopment of London Bridge station. In return, the fees that Southern collects in fares are passed to the Government. It means that during the 20 days lost to strikes this year – when there are no fares to collect – the Government must bear the cost of £38 million in lost revenue. The deal also states that the Government will pick up the tab for compensation claims likely to be filed by passengers who have paid season ticket fares but have no services to catch – an estimated £15 million. Nick Herbert, the Conservative MP for Arundel and South Downs and a former minister, said:  “Because of the way the franchise is structured, there isn’t proper accountability. It should be the company bearing the cost of compensation and failure to meet targets.” Meanwhile, Govia Thameslink Railway, the company that runs Southern, is saving an estimated £1.1 million in pay for train drivers and conductors who are out on strike this week. Govia could still be hit with financial penalties totalling tens of millions of pounds for delayed and cancelled services. However, it is claiming that disruption caused by strikes and staff sickness is a force majeure and it should therefore not have to pay the fines.


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

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

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

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

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

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

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

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

Thursday, 8 December 2016

Thursday, December 08, 2016 Posted by Hari No comments Labels:
Britain's agency workers underpaid and exploited
Britain’s rapidly growing army of agency workers is as serious an issue as zero-hours contracts, with full-time agency staff earning hundreds of pounds a year less than employees doing the same jobs, according to a new report into the issue by the Resolution Foundation. Its report deplores that the “exploitation of agency staff remains unaddressed,” while the treatment of staff on zero-hours contracts at places like the Sports Direct warehouse in Shirebrook has made headlines and prompted changes. Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “While zero-hours contracts are often in the news, agency workers are the ‘forgotten face’ of the modern workforce, despite being just as prevalent across the labour market. This fast growing group is not just made up of young people looking for temporary employment as some have suggested, but instead includes many older full-time, permanent workers.” Agency work is booming, but it means an average pay penalty of 22p an hour, equivalent to £430 a year for those working full-time, according to the report, entitled Secret Agents: agency workers in the new world of work. The loss of earnings rises to 45p an hour for permanent agency workers. Agency workers also lack basic employment rights: they are not entitled to sick pay or parental leave pay, have no notice period and little recourse in the event of dismissal. Despite the stereotype of agency workers being short term and temporary, half of all agency workers say they work on a permanent basis and three-quarters work full time. The number of office temps, bank nurses, fruit pickers, IT consultants and other agency staff has grown by 30%, or 200,000 people, to 865,000 since 2011 and is set to swell to a million by the end of the decade, according to the independent thinktank’s analysis of Labour Force survey data. Agency work is most prevalent in the healthcare and social sector, where 18% of all agency staff work, closely followed by manufacturing (17%) and business activities (17%). The latter includes conference organisers, credit rating agents, business consultants and literary agents. Nearly one in five agency workers are in London, but the East Midlands has the largest share of the local labour force working in this way (3.2%). GUARDIAN

Bank of England chief economist warns of regional growth inequality
Regional inequality in the UK is becoming more pronounced, Bank of England chief economist Andrew Haldane has warned. London and the South East are the only places in the UK where income per head is back above pre-financial crisis levels, he said. Net wealth has also fallen in places such as the North East of England. "The UK, I think, is towards the bottom of the league table within Europe in terms of its degree of difference across regions," said Haldane. He said that wage differences between regions of the UK could differ by as much as 50% and that the productivity gap between regions could be as much as 60%. Mr Haldane also said there had not been much evidence of those gaps shrinking over the past few years. "If anything these gaps, which are of long standing have nudged a little wider over the course of the UK's recovery," he said. There was no single reason why there were such big and persistent differences between regions, he said. But he thinks differing levels of skills and research and development could be partly to blame. "Very much more of the research and development occurs, as you might expect, in those high productivity, high income regions of the country," he added. Mr Haldane said regional inequality was among the most important issues facing the UK. Reducing the gap could open up considerable opportunities, he said. For example, he said that if the productivity levels of all companies could be brought up to the levels of those in the most productive parts of the UK it would boost productivity "by fully 20%". "It would take the UK right up there to rival the Germanies of this world when it came to efficiency and performance," he added. BBC NEWS

Manchester United manager Mourinho may face tax probe
The tax affairs of football manager Jose Mourinho should be investigated by British officials following allegations he used off-shore companies to reduce his tax bill, a UK MP has said. Mourinho is accused of moving millions of pounds of earnings to the British Virgin Islands to avoid paying tax. Further claims about the tax affairs of Mourinho - as well as other top international football stars - have been made in the Sunday Times and other European newspapers. The publications acquired leaked documents from the website Football Leaks, following a cyber attack on football agents earlier this year. Mourinho has been accused of using "a complex web of off-shore companies" to avoid paying tax in the UK and Spain. The allegations surround his time as manager of UK side Chelsea, between 2004 and 2007, and Spanish club Real Madrid, between 2010 and 2013. According to the reports, Portuguese-born Mourinho, 53, placed £10m (€12m) into a Swiss account owned by a British Virgin Islands (BVI) firm. The newspaper claims Mourinho and his advisers deducted substantial costs for a BVI company - which it suggests has no employees. The Sunday Times says Mourinho - as well as Real Madrid star Cristiano Ronaldo - also used bank accounts and companies in Ireland, Switzerland and New Zealand to process substantial earnings for their image rights. BBC NEWS

Energy firms failed to return £4bn in customer overpayments
An investigation by Radio 4's You & Yours programme has found that some domestic energy accounts are thousands of pounds in credit. Energy suppliers are under no obligation to tell customers if their credit becomes excessive. However, they must pay back the surplus if homeowners request a refund. Direct debit energy payments spread the cost of gas and electricity evenly across the year. Many customers are often in debit during the winter and build up credit in the summer. Ofgem has previously calculated that a typical customer's credit balance peaks at a little over £100 each year. Figures obtained from energy regulator Ofgem through a freedom of information request reveal that, in October 2015, the UK's energy suppliers held a total of £3.98bn of credit on their customers' accounts. At that time, there were nearly 31 million energy customers in the UK, but the credit is not evenly spread among customers. David Flanagan, from Warrington, was shocked to discover that his energy supplier owed him £3,049. "I was quite annoyed that the supplier had not bothered to contact me. If I'd have owed them £3,000, would they have been so tardy in contacting me? I can't believe that companies are so incompetent that they don't know what's going on," he said. The energy regulator, Ofgem, said people should keep an eye on their account and ask for a refund, if their credit felt too high. Some energy suppliers provide annual automatic refunds. British Gas, EDF, Npower, SSE and E.On told You & Yours they automatically returned credits each year, if meter readings were up to date, as did Ovo, Green Star Energy and Flow. First Utility said they provided refunds on request. BBC NEWS

Pfizer hit with record fine after hiking price of NHS epilepsy drug by 2,600% - costing taxpayer £50m
Drug firms Pfizer and Flynn Pharma have been fined nearly £90m for "excessive and unfair" pricing to the NHS after hiking the cost of an anti-epilepsy drug by up to 2,600pc overnight. The Competition and Markets Authority (CMA) said drug maker Pfizer and distributor Flynn Pharma broke competition law when they increased the cost of a medicine used by around 48,000 patients in the UK. The watchdog said their moves saw the cost to the NHS of phenytoin sodium capsules rocket from around £2m a year in 2012 to about £50m in 2013 - far more than Pfizer was charging in any other European country. Pfizer was handed a record £84.2m fine, while Flynn Pharma was fined £5.2m. The CMA has also ordered both firms to reduce their prices for the anti-epilepsy drug. The CMA said that before September 2012, Pfizer made and sold phenytoin sodium capsules to UK wholesalers and pharmacies under the brand name Epanutin and the prices of the drug were regulated. But Pfizer sold the UK distribution rights for Epanutin to Flynn Pharma in September 2012, which then saw the drug de-branded - or made generic - meaning that it was no longer subject to price regulation. Both firms then each ramped up the price of the drug, meaning that overnight the NHS saw the cost surge by between 2,300pc and 2,600pc, according to the CMA. It said the NHS at one stage saw the price of 100mg packs of the drug jump from £2.83 to £67.50. The NHS had no alternative but to pay, as epilepsy patients who are already taking phenytoin sodium capsules should not usually be switched to other products due to the risk of loss of seizure control. The fine comes after GlaxoSmithKline and a number of generic pharmaceuticals were hit with a £45m penalty in February after a "pay-to-delay" scandal surrounding blockbuster anti-depressant drug Seroxat. Glaxo was found to have made more than £50m of payments to companies making cheaper generic versions of Seroxat to delay them coming to market. TELEGRAPH

HSBC, JP Morgan and Crédit Agricole traders slapped with £413m fine after using chat-rooms to rig key bank rate
After a five-year investigation, the EU's anti-trust watchdog said the three banks colluded to manipulate the Euribor interest rate between September 2005 and May 2008 by exchanging sensitive information 'to distort the normal course of pricing'. JP Morgan was given the biggest fine at €337million. HSBC was handed a €33million penalty and Crédit Agricole was given €114million. The fines were based on the time each participated in the cartel and the value of products involved. In a statement, the European Commission said: 'The traders' aim was to distort the normal course of pricing components for euro interest rate derivatives... They did this by telling each other their desired or intended EURIBOR submissions and by exchanging sensitive information on their trading positions or on their trading or pricing strategies.' The case covers manipulation of financial contracts linked to the benchmark Euribor interest rate between 2005 and 2008. In 2013, anti-trust regulators reached a settlement with Barclays, Deutsche Bank, Royal Bank of Scotland and Societe Generale as part of the same case. HSBC, JP Morgan and Crédit Agricole did not agree to the 2013 settlement. DAILY MAIL

Spread-betting industry loses £1bn after City watchdog steps in
More than £1bn has been wiped off the stock market value of the spread-betting industry after the City regulator announced a clampdown to protect inexperienced retail customers from unexpected losses on complex trades. The Financial Conduct Authority said it was concerned about people opening online accounts with spread-betting providers without understanding the products they were trading. A representative sample of customer accounts found that 82% lost an average of £2,200 on the products, known as contracts for difference (CFDs). The regulator proposed a series of measures to protect consumers, including standardised risk warnings, compulsory disclosure of total profit-loss ratios across all clients, limits on trading using small amounts of capital and banning companies from using bonuses to tempt people to start trading. Shares in publicly traded spread-betting companies plunged after the announcement. Shares in IG Group, the biggest operator, plummeted by 32% to 532p, wiping more than £900m off its value. The FCA has been examining the industry since July 2015. In February, it told companies to do more to protect customers from losses after finding that checks on their suitability and warnings about risk were inadequate. GUARDIAN

British thinktank received £25m from Bahraini royals, documents reveal
A British thinktank that bills itself as a global authority on military and diplomatic affairs has been accused of jeopardising its independence after leaked documents showed it has secretly received £25m from the Bahraini royal family, which has been criticised for its poor human rights record. Confidential documents seen by the Guardian show that the country’s repressive rulers donated the sum to the London-based International Institute for Strategic Studies (IISS) over the last five years. The documents also reveal that IISS and the Bahraini royals agreed to “take all necessary steps” to keep most of the donations secret. The Bahrain donations make up more than a quarter of IISS’s income. The confidential documents have been obtained by Bahrain Watch, an independent organisation that seeks to promote democracy and social justice in the country. The group believes the secret donations undermine the independence of IISS, which says it is a non-partisan organisation that provides objective information about the world’s security issues. IISS has rejected the accusation. IISS, whose headquarters are on the north bank of the Thames in central London, said its mission was to promote “sound policies to further global peace and security and maintain civilised international relations”. Its specialists are often quoted in the media. Campaigners have criticised Bahrain’s rulers for dissolving the main political party, jailing and torturing activists, and persecuting opposition supporters and clerics. GUARDIAN

Thursday, 1 December 2016

Thursday, December 01, 2016 Posted by Hari No comments Labels:
UK living standards squeeze 'will be worse than after global crash' over next 5 years
Analysis of Wednesday’s autumn statement by the Resolution Foundation thinktank suggests average earnings are set to grow only half as rapidly as in the austerity years after the economic crisis. At the same time, living standards will be undermined by higher inflation and ongoing welfare cuts. While the squeeze of the last parliament affected workers across the income spectrum, the foundation says low-paid households are set to be hardest hit over the next five years, because they are particularly affected by planned welfare cuts. The chancellor, Philip Hammond, announced a modest softening of cuts to universal credit in the autumn statement, but a £3bn cut in the “work allowance” claimants can earn before their benefits are withdrawn will go ahead. His predecessor George Osborne also previously announced a four-year cash freeze in most in-work benefits, which will go ahead. The foundation’s director, Torsten Bell, said: “Unlike the last parliament, it will be low- and middle-income households who feel the tightest squeeze this time round.” The foundation cites forecasts from the Office for Budget Responsibility (OBR), which predicted a challenging fiscal climate in the face of Brexit and wider international economic uncertainty. GUARDIAN

Bank governor Mark Carney warns on rising household debt
The governor of the Bank of England, Mark Carney, has said that consumers were borrowing more on their credit cards and other unsecured debt. Figures from the Bank this week showed that credit card lending is at a record level, up by £571m in the last month. Overall unsecured debt - which includes overdrafts - is rising at its fastest pace for 11 years. The Bank's Stability Report showed that the overall ratio of household debt to income was 133% in the second quarter of 2016. The Bank said that was high by historical standards, although it was not as high as in the financial crisis. In general the outlook for UK financial stability after the Brexit vote "remains challenging", said the Bank's report. It said stability was dependent on an orderly exit from the European Union, while it would take time to clarify the UK's new relationship with the EU. Otherwise the greatest risks to UK financial stability are slowing growth in China and the eurozone, the report said. UK banks are particularly exposed to events in Europe. They provide more than half of debt and equity issuance by continental firms, and account for more than three quarters of foreign exchange and derivatives activity in the EU, it noted. BBC NEWS

National Living Wage 'has not hit employment' says government monitor
The Low Pay Commission said it had found "no clear evidence" of changes in employment or hours since the higher minimum wage was introduced in April. It said employment had continued to rise even in sectors most obviously affected, such as cleaning, hotels, horticulture and retail. The finding contradicts warnings from economists over the wage's impact. On Tuesday, the Organisation for Economic Co-operation and Development said the UK should be careful with plans to raise the National Living Wage, warning it could affect employment. The think tank's stance echoes the widespread claims of business organisations in the 1990s that the introduction of the UK's national minimum wage - which started in 1999 - would lead to widespread job losses. Those fears proved to be groundless, with the number of people in employment rising from 27 million then to nearly 32 million now. The Low Pay Commission warned that "in some cases" employers may have reduced other staff payments or perks to fund the higher basic wage, but said it had found "no significant change" in levels of overtime and the higher hourly rates paid for working on Sundays or bank holidays. The commission also said that the higher National Living Wage could "present challenges" for the social care sector, with many providers facing losses. The National Living Wage came into effect in April this year, and was set at a rate of £7.20 an hour for workers aged 25 and over, with the aim of increasing it to £9 an hour by 2020. BBC NEWS

Government outlines plans to make companies justify high levels of executive pay
Among the measures under consideration are pay ratios, which would show the gap in earnings between the chief executive and an average employee. Shareholders would be handed more powers to vote against bosses' pay, but the government will not force companies to put workers on boards. Prime Minister Theresa May has made tackling corporate excess a priority. Her Conservative government is "unashamedly pro-business", but big firms must earn and keep the public's trust, she said in the consultation plans. Chief executives of FTSE 100 firms now have a median pay package of £4.3m, which is 140 times that of the average worker, according to the High Pay Centre. "There may be some circumstances where that is defensible, but it should be for the boards of companies and executives to justify that," Business Secretary Greg Clark told the BBC. He said the UK was not alone in targeting pay ratios, with the US set to report them at the start of next year. However, businesses have warned it would be difficult to compare pay ratios across companies. By comparing pay gaps, Goldman Sachs will look like a more equitable company than John Lewis thanks to the very high pay of the average banker, which is around £400,000. Other suggestions from the government include more frequent binding votes by shareholders on chief executive's pay packages. "The right thing is to give greater powers to shareholders to do their job in holding executives to account," Mr Clark said. The proposals form part of the government's Green Paper on corporate governance reform, which aims to increase public trust in business. The paper also includes measures on: Ensuring the "voice" of employees and customers is better represented on company boards; Holding privately-held firms to the same corporate governance standards as publicly listed companies. BBC NEWS

Government starts review of low pay 'gig' economy
A team of four experts is preparing to tour the UK to explore how the "gig" economy is affecting workers' rights. Mathew Taylor, chief executive of the Royal Society for the Arts, was appointed last month to lead the review into the impact of "disruptive" businesses such as Uber and Deliveroo. New technology combined with new business models has led to a rise in workers doing short-term, casual work. Many are not eligible for the minimum wage, sickness or maternity pay. The review will address questions of job-security, pension, holiday and parental leave rights. It will also look at "employer freedoms and obligations". Mr Taylor will be joined by the entrepreneur, Greg Marsh, who founded onefinestay, a company which helps upmarket home-owners let their properties to visitors, Paul Broadbent chief executive of the Gangmasters Licensing Authority and employment lawyer, Diane Nicol. The team will be talking to businesses and workers across the UK, including in Maidstone, Coventry and Glasgow. It will look into practices in manufacturing and rural economies as well as the "gig" economy. The government's Autumn Statement earlier this month indicated how the "gig economy" is also beginning to affect budget revenues, as self-employment and casual work reduce the amount of tax being paid. The Office for Budget Responsibility (OBR) estimated that in 2020/21 it will cost the Treasury £3.5bn. BBC NEWS

RBS fails Bank of England “stress test”
The toughest stress test yet assessed how the UK’s seven biggest lenders would cope with hypothetical scenarios including a recession, a housing crash and a halving of the oil price. RBS, which is still 73 per cent owned by the government after its bailout in 2008, has emerged as the worst hit in the annual health check of the banking system. This means the lender must take action to protect itself against a sharp slump in the economy. RBS has issued a plan intended to bolster its financial strength by an estimated £2bn, which has been accepted by the BoE. Barclays and Standard Chartered also struggled under the test, however neither was required to submit a revised capital plan. The test also covered HSBC, Lloyds Banking Group, Santander and Nationwide.They did not reveal any capital inadequacies in the test, the BoE said. Britain's banking system underwent a severe real-life test in June when markets and sterling plummeted in response to Britain's vote to leave the European Union. Banks could be required to change their business models to make them more sustainable as they face a prolonged period of low interest rates and uncertainty over Britain's future relations with the EU after it leaves the bloc. INDEPENDENT

FCA may introduce price cap on rent-to-own goods possible, following success of payday loan cap 
Up to 400,000 people use rent-to-own firms to buy household appliances, paying the money back over three years. After interest, they can end up paying three times the original price. It follows a call for a cap from Citizens Advice, which said restrictions imposed on payday lenders two years ago had been a success. Citizens Advice also said there was a lack of affordability checks in the industry, meaning that people signed up to agreements they could not afford. And it said that rent-to-own firms did not always take a flexible approach when shoppers got into debt. However, BrightHouse, the biggest rent-to-own firm, accused Citizens Advice of producing a "misleading" and "inaccurate" report. The FCA said that it would be prepared to consider a cap in the rent-to-own market, but added that in the case of the payday loan sector it had been a "last resort". "The price cap is very much the thing we do when all other price measures don't look very promising," Andrew Bailey, chief executive of the FCA, told the BBC. Since January 2015, the FCA has imposed a cap on the amount that payday lenders are allowed to charge their customers. Loan repayments are limited to no more than 0.8% per day of the amount they borrowed, and in total no one should pay back more than twice the original sum. Since the introduction of that cap, Citizens Advice says that the number of people with payday loan debt problems has halved. So it wants similar controls on the rent-to-own market. Mr Bailey told the BBC that catalogue lending and pawnbroking would also be considered. It is important that people can still have access to credit, but the FCA wants them to have it "on terms that are fair to them", he said. BBC NEWS

Line rental prices up 41% in just six years while wholesale costs fall by a quarter. Is it finally time to clamp down on price hikes?
Households are being ripped off when it comes to landline rental prices, damning evidence from Ofcom suggests. Telecoms providers have been rising line rental prices consistently since 2010 largely blaming 'infrastructure costs' - but the watchdog says wholesale costs have actually fallen by a quarter in that period. As a result, it has finally today launched a review into the monthly cost faced by anyone who wants broadband, even if they don't use the landline telephone. The watchdog says line rental prices have risen between 28 and 41 per cent in real terms since 2010 – this, despite providers such as BT, Sky, TalkTalk and Virgin Media benefiting from a 25 per cent fall in the wholesale cost of providing a landline service. The rise in rental prices have particularly hit those who rely solely on landlines, such as the elderly and vulnerable, the watchdog says. Ofcom adds that the elderly and vulnerable are more likely than most to have stayed with the same phone company all their life. They also do not benefit from strong competition in the market for 'bundled' communications – where landline, broadband and pay-TV services are packaged together. DAILY MAIL

Tuesday, 29 November 2016

Tuesday, November 29, 2016 Posted by Hari No comments Labels: , , , , ,
There is one thing that all major parties are, and have always been, in unanimous agreement on. Fixing the never-ending housing crisis.

The benefits would cascade into other big vote winners. Take these three. Sensible house prices leave more money in everyone's pockets to boost the rest of the economy. Being low paid will hurt less. And a major house building programme away from London and the south east would underpin a big-picture coordinated regeneration of the regions.

So why hasn't the problem been swept away to the deafening cheers and applause of all sides of the house? Because of the political and "economic" reasons for never doing so. Let's walk this one through.

Why are those rents and house prices so high?
This is being fixed, right? Wrong!

Of all the problems we face, surely this is the one that will be fixed first and fastest. Why? Because the TV news is full of politicians promising to solve the housing crisis with the same solution: build more homes. Politicians, of every party, in every election, with no exceptions.

So, that’s a good start. After all, the UK has some of the highest rents and house prices in the world.
The average renter in England is spending 43% of their household income on rent. Most economists will tell you that a maximum of a third of income, a much lower figure, is what is reasonable.

As for buying a house, latest figures show the average household today takes 24 years to save for a deposit to buy a house. Back in the 1990s it was only 3 years.

Image result for property

We shouldn’t even be calling it a “housing crisis”, because the word “crisis” gives the impression that this is an unexpected and temporary problem. It’s the wrong word to use. It’s clear this has been going on for decades.

Yet despite all the promises to fix it, the problem just isn’t going away.

Why are high house prices and rents a problem?
It’s not, for some. That’s why it’s not being fixed

If a problem doesn’t go away, you can be pretty sure that someone doesn’t think it’s a problem at all!
It’s a well known joke among the property-owning classes that most dinner parties end up with everyone discussing their property prices. Correction: their rising property prices. And these aren’t super-rich property moghuls. These are mostly ordinary folk. In the UK around two-thirds of us are home owners. Most will be over 40, who bought when properties were more affordable. Some will have got financial help from well-off parents. Either way, it means they’ll have got on the property ladder without needing binoculars to see the bottom rung, and a rope and grappling hook to get on it [cartoon?]. Then there are the millions of landlords. Obviously, they like rents that comfortably cover the loan (mortgage) used to buy the property in the first place. The rents keep rising, but the cost of that loan doesn’t. So it’s a no-brainer to them.

That makes a lot of people who, when they vote, vote for parties that mouth off about fixing the problem but can be relied upon never to do so.

And let’s not forget that almost a third of MPs are landlords, letting out houses or flats.

But it is an awful state of affairs for tenants and people trying to buy. And there are a lot of them too. So it’s tenants versus house owners and landlords. What can break this deadlock? How about a closer look at how it’s a huge problem for the economy as a whole. Oh, and simple fairness.

Money should be spent on things that “add value.” In other words, the customer is getting something new, something more, or fixing something broken. If you spend more on furniture, you get more or better furniture. But rapidly rising rents and house prices are delivering the same old houses. That’s just bad economics.

An efficient economy rewards effort and risk. But landlords and house-owners are making money with little effort or risk. Very inefficient, as well as unfair!

And this all causes deeper problems for the UK economy, to do with spending and saving. Every nation needs its citizens to both spend (to live today) and save (to spend in old age). The spending keeps the economy ticking today. The savings don’t just sit there, but get invested in infrastructure and innovation for the future. Both are essential. Get the balance wrong, and one or other takes a dive and we’re all in deep trouble. Normally, younger people spend much more than they save. Older people, earning more, do most of the saving. That’s normally. But rising house prices have got older people into a bad habit. Why save for your old age when you can, when the time comes, sell your over-priced house? It’s one reason why since the early 1990s Brits have steadily been saving lessIn effect, this generation of home owners are getting the young to do their saving for them, by getting them to save up to buy their overpriced house some time in the future. 
Image result for property site:rippedoffbritons.comWhich means the next generation are forced to pull the same trick on those following behind them. And on and on. So here’s a warning to young people: when your indulgent parent tells you “Darling, my money is your money,” they’re not kidding.

So that’s the nation’s savings screwed up. What about spending? Money spent on over-priced rents and houses is money not spent on the high street. So it’s bad for business and job creation. Yes, landlords spend too. But 60% of all properties in the private rented sector are owned by landlords that rent out more than one property. Half of them, around 30%, are owned by landlords that own 10 or more dwellings. This changes the pattern of the nation’s spending – how much, and crucially on which high street - when all those tenants cut their spending to hand over higher and higher rents to their landlord. Three tenants need three haircuts. One landlord just needs the one. And what if he’s bald?! We shouldn’t joke, or some housing minister will promise subsidised hair transplants to bald landlords, in another pathetic attempt to put another sticking plaster on the disastrous side-effects of the housing crisis. Yes, landlords will spend their profits on other things too, but not on your high street. Yes, older home owners will ultimately sell up and spend some of it. But the same applies. The tenant’s pound – which should have been spent on their high street – goes to the landlord. The landlord spends some of it – on his or her high street, wherever that is! – and likely uses the rest to bid on another house, pushing property prices up further.

Every government makes a promise to build enough new homes
Then promptly breaks it

In 2015 the housing minister said the government aimed to see one million new homes in England over this Parliament (2015-2020). That’s 200,000 a year. He was one of a long list of ministers over the decades who has made such promises. By November 2016 the (new) housing minister admitted the target would be missed.

200,000 a year? The last time England hit that figure was 1980. Since then it’s typically been 150,000 or below.

[Graph from the National Audit Office]

But that 200,000 won’t be enough. The National Housing Federation (NHF) said even more - about 245,000 new homes - are needed each year in England to stabilise prices.

Nothing near that number is being built. The NHF’s figures showed only 457,490 were built between 2011 and 2014. The NHF estimate 974,000 homes were needed during that period.

So, at the current rate, we’re not even half way there. That failure guarantees continued crazy rent and house price inflation, with no end in sight.
To make matters worse, London has got itself a reputation throughout the world for being a place where property prices only ever rise. So even rich overseas investors are buying properties, pushing prices up further.

There are other problems. They make things worse, and need to be fixed. But they should not be allowed to take attention away from the big problem: not enough houses. One example is empty houses and empty rooms. In many cases, some of the richest landlords don’t even bother to rent out their properties, and leave them empty, so sure they are that their “investment” will make plenty from prices that keep on rising. Angry politicians have upped the taxes on empty properties, and rightly so. But only around 200,000 properties across the whole of the England are ever empty for more than six months, so a tax on them is just another sticking plaster over a minor wound, while the major surgery needed is postponed again.

Next. Seven in 10, or 16 million, households in England and Wales have at least one spare bedroom, with eight million homes having two or more. It’s partly down to older parents, whose kids have left, staying in their family houses rather than downsizing and putting the profit in a pension. That’s what happens when rapidly rising property prices are a better investment than a pension. It’s also partly down to people just wanting a spare room. Talking some of these people (by the way, there’s little talking involved. It’s either through a benefit cut threat or a tax break bribe) into swapping a large home for a smaller one, or renting out the spare room, will help but it’s not likely to significantly change the total number of homes available.

What’s stopping house building?
The “green belts”? Or the divisive, corrupt, stupid, and cowardly

People want houses where their jobs are. That means cities and towns. But building more homes often means building on “green belts”. These are, as the name suggests, fields, parks and forests that the locals already enjoy for recreation. The locals don’t want buildings there. Better to build on “brownfield” sites. This is land that has previously been used for industrial and commercial purposes and is now derelict. And doesn’t have people in wellies and flowers in their hair chained to the trees and shouting “go build your faceless grey concrete monstrosity someplace else”. But even here planning regulations slow the process down. And even when there is some land available somewhere in the cities and towns, it is never enough.

What of the land that’s got the planning permission? The ‘big developers’ have ‘a stranglehold on supply’, said Sajid Javid, the Communities Secretary, and are ‘sitting on land banks’, while ‘delaying build-out’. Basically, big developers like a housing shortage, because they can sell their houses for more. Since 2008, the average time lag between a housing unit being granted permission and the home appearing on the market has risen from 21 to 32 months. They get away with it because there’s no real competition. The three biggest players build more than a quarter of all new homes. The top eight account for half. A House of Lords report said the industry “has all the characteristics ofan oligopoly”.

But there are other reasons that have nothing to do with space or profiteering big developers, and everything to do with politics.

Property owners don’t want their house prices to fall, which is what would happen if there were easily enough homes for everyone. Politicians fear property owners will not vote for them if they put an end to rapidly rising house prices. Remember, two in three households are property owners.

Governments have become addicted to the mirage effect our dysfunctional housing market has on the nation’s balance sheet. They can sit back, do nothing, and pass rising house prices off as wealth-creation. Look at it this way. Let’s say house prices stabilised, and people therefore get to spend more and more on furniture. The total value of the nation’s furniture doesn’t get measured! And furniture falls to pieces after a good few years. But house prices get measured. Now, you’d think that cheaper homes, but hundreds of thousands more of them (that’s what’s stabilised the house prices), would result in the same total amount of national housing asset wealth. You’d be right. But the foolish status quo allows our cowardly governments to steer clear of fights with those existing property owning voters. But it’s plain stupid to forego real wealth creation (stable house prices yet many more houses, leaving households with more money to spend on other things) for fake wealth creation (same old houses, just more expensive).

Image result for property site:rippedoffbritons.comStabilising house prices stops you using your house as your pension. You’d have to start using your pension as your pension! Now that’s crazy talk! Because it would need our pensions system to be fixed. Every decade has scandals over company pension pots disappearing, banks charging exorbitant fees for managing your pension, or governments changing the law so that your pension pays out less than what you expected. Hands up which government has seriously confronted the companies, banks and their own selves over our crummy pensions? None. Our governments clearly have little faith in pensions, so no wonder ordinary people don’t either. So no wonder so many are relying on cashing in their houses, instead of having a decent pension.

In the 1950s, 60s and 70s, we built new houses like crazy, averaging over 300,000 a year for twenty years. After that we built the bare minimum. So it’s divisive, corrupt, stupid, and cowardly. And unfair. It can’t be fair that young adults have to work so much harder than older generations to have the same housing. 

Prices in London and the south east are crazy. Why not live somewhere else, somewhere cheaper?
You can’t live where the jobs aren’t

You need to live near where your job is. There are always cheaper houses and rents somewhere, but not where jobs are being created. The midlands and the north are parts of the country that used to thrive – the engine room of the empire! But since the 1950s most job creation has happened overwhelmingly in London and the south east, whilst many big industries of the north (manufacturing, in particular) have shrunk.

We should be less focused on building new homes in London, and invest and create jobs outside the south-east of England.

Image result for property site:rippedoffbritons.comFor a start, the rest of the UK has the space for the new houses. The worst of the “green belt” problem goes away – the only good reason for not building a house.

There are other massive benefits. High housing costs in London and the south east make all the other costs of doing business high. Not just business rents. Staff need higher pay to cover their own housing costs, and those rising wages make everything else – cups of coffee, doctors and nurses, transport, everything – more expensive.

House building outside London is easier and cheaper than in London. Think of all the pipes and cables you need to lay, running to new utility plants. Then there are the new schools, hospitals, and other essential services.

The bigger problem is the creation of the jobs. In Manchester, Liverpool, Leeds, Newcastle etc. We’d need to get public and private services and businesses to move to where they had no plans to go. And their staff.

It can be done. Even that stick-in-the-mud the BBC relocated 1,800 jobs away from London to Salford, near Manchester, and backed the creation of MediaCityUK. Many BBC staff were dismayed. Some resigned rather than move. But by 2015 the BBC employed 2,500 there, with other media organisations employing thousands more.

Creating jobs outside the south east would be a big vote winner. The rest of the UK would be delighted by any government that created jobs in their region, rather than in the usual place: London. All it needs is for the number of these voters to exceed the number who want property prices to keep rising. And a strong, visionary and eloquent national leader who can explain that the current system is unjust, punishes hard working people who have to rent and can’t get on the property ladder, prone to cartel behaviour by the builders, and fools the whole economy into creating fake wealth instead of the real thing.

[SOURCE GUARDIAN: London gets 24 times as much spent on infrastructure per resident than north-east England]

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