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RICKETS IS BACK
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UK: A PRISONER OF CUTS
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UNIVERSAL C.. OCKUP
FULL TIME JOBS? WHERE!

Saturday, 28 March 2015

Saturday, March 28, 2015 Posted by Jake 1 comment Labels: , , , , ,
Defining who is very rich is not straightforward. Some with vast wealth have little income and live in poverty (for example, low income pensioners living in million pound London houses bought for a song decades ago). 

For this post we consider households with more income than 90% of households in the UK. Perhaps not all "rich", but certainly "richer than most". 

We use the Household Disposable Income data from the Office for National Statistics (ONS). 

These ONS figures for 2013 show the top decile (top 10%) of households had 13.4 times more disposable income than the bottom decile of UK households. 

[Disposable Income = income after receiving state benefits and paying direct taxes (e.g. income tax is taken out, but not VAT which is an indirect tax). Disposable Income is effectively a household's "spending money".]

Thursday, 26 March 2015

Thursday, March 26, 2015 Posted by Hari No comments Labels:
Britain's in love with borrowing again: Household debt hits record £9,000 and is growing at the fastest rate in a decade
The figure, which does not include mortgages, soared by £20billion or nine per cent last year to hit £239billion, a report from PwC found. The situation will only get worse as interest rates start to rise, which will mean Britons will have to fork out an increasing proportion of their incomes on servicing their debts. What's more PwC projects unsecured borrowing will grow over the next two years between four per cent and six per cent annually, it said in its report Precious Plastic: How Britons Fell Back In Love With Borrowing. This would bring average household non-mortgage borrowing just shy of £10,000 by the end of next year – unchartered territory in terms of borrowing levels. The average credit card balance rose to £1,021 by the end of the year, which is just £39 off the all-time high seen at the beginning of 2010. Nearly half of the increase in borrowing last year came from students, PwC said, warning that graduates who started university after 2012 could leave with an average debt of £40,000 to £50,000. The total household debt to income ratio, including mortgage debt, is projected to reach around 172 per cent by 2020 – surpassing its previous peak in the run-up to the financial crisis. Already some households are depending on credit for essential items, particularly 35 to 44 year-olds, with close to 20 per cent borrowing simply to make ends meet. DAILY MAIL

MPs denounce government TTIP plans amid fears for NHS and public services
A future government must be allowed to expand the NHS without facing legal challenge under a proposed new EU-US trade deal, according to a sharply critical report from an all-party committee of MPs. The Business, Innovation and Skills committee said the government needed stronger evidence to back up its claim that the Transatlantic Trade and Investment Partnership (TTIP) would bring a boost of £100bn a year to the UK. It also said the case had not been made for the highly controversial investor-state dispute settlement (ISDS), the provision that would allow private investors to sue governments for the loss of future profits caused by decisions made by national parliaments. The committee reserved its strongest criticism for the government, which has been firm in its support for TTIP and wants the European commission to conclude negotiations as swiftly as possible. “Whilst TTIP has the potential to deliver economic benefits to the United Kingdom, it is impossible at this stage to quantify those benefits in any meaningful way. Rather than continue to use the £100bn figure, the government must come up with a comprehensive assessment which includes the estimated economic yield of a variety of levels of agreement.” The report added that MPs were “deeply concerned” about the government’s intention not to submit a formal response to the EC’s consultation on ISDS provisions. GUARDIAN

More high street chains named and shamed over failure to pay minimum wage
The government has named almost 50 employers for failing to pay their workers the national minimum wage, including childcare nurseries, restaurants and a 99p store. The 48 employers, who owed £162,000 in arrears, were in sectors ranging from fashion and publishing, to health and fitness and retail, with penalties totalling more than £67,000. More than 200 employers have now been “named and shamed” since a new regime came into force in October 2013, with total arrears of £635,000 and penalties of almost £250,000. The latest cases included: French Connection in London, which the business department said had neglected to pay £16,400 to 367 workers; Toni & Guy in Wilmslow, Cheshire, alleged to owe £1,031 to one worker; Call & Deliver, trading as Pizza Hut in Heckmondwike, Yorkshire, said to owe £163 to nine workers; and 99p Stores in Northampton, apparently owing £633 to 11 workers. The cases were all investigated by HM Revenue and Customs. Toni & Guy said: “As a company with over 400 salons globally under its brand umbrella, we do not condone any kind of mishandling of staff wages. Once made aware, the franchisee resolved the issue swiftly.” But Newham council in east London called on the government to allow local authorities to tackle businesses failing to pay the minimum wage. A report by the council and the GMB union said more than £500m was lost to workers across the country because firms paid below the statutory minimum rate. Almost a fifth of residents in Newham are paid below the minimum wage, at an average of more than £2,200 per worker, it was estimated. GUARDIAN

Businesses, running on Diesel, are being ripped off by retailers who are looking to offset losses from low petrol prices
Fuel retailers are ripping off the public and businesses on diesel charges, according to the RAC. Companies, which more often run on diesel, are hit hard by the fuel rip-off. The wholesale price of diesel is 1p a litre more than for petrol, yet diesel is almost 6p more at the pumps, it said. There is scope for a diesel price cut of around 4p a litre to restore some parity to the market, the RAC added. The RAC’s comments came as it highlighted Government figures which showed total fuel sales were up 3.5 per cent in February compared with the same month last year. Diesel sales last month, at 2.42billion litres, represented the fifth highest monthly total since 1990. But petrol sales are among their lowest for 25 years. Because companies traditionally run on diesel, they are particularly hard hit by the fuel rip-off. RAC spokesman Simon Williams said: ‘It’s hard not to think that business is being taken for a ride. 'With sales of diesel at an all-time high the retailers have maintained a higher margin on diesel, perhaps to subsidise petrol sales.’ DAILY MAIL

Tuesday, 24 March 2015

Tuesday, March 24, 2015 Posted by Hari No comments Labels: , , , , , , , ,

SOURCE: A report by the Centre for Research on Socio-Cultural Change (part of the University of Manchester and the Open University) observed: "the remarkable result is that under Mrs Thatcher from 1979-90, just as under Tony Blair from 1997-2007, the real value of Housing Equity Withdrawal is larger than the real value of GDP growth"

Saturday, 21 March 2015

Saturday, March 21, 2015 Posted by Jake No comments Labels: , , , , , , , , ,
Ripped-off Brits: pensionsDickens' fictional optimist Mr. Micawber stated the secret to his happiness was to have an income larger than his expenditure. 

Dickensian optimistic fictionalist George Osborne devised a way to dodge this restriction of income threatening to stand in the way of his happiness. 

George conceived a way to lower our incomes (low pay recovery and welfare cuts) and yet increase our household expenditure (which since 2012 has been the basis of GDP growth, and therefore the foundation of Osborne's credibility and thus his happiness).

In March 2015 the Office for National Statistics (ONS) commented "following recent trends, quarterly growth was largely driven by stronger household spending". Helped in no small extent by consumers spending the £20billion paid in compensation by the banks for their Payment Protection Insurance scam. The ONS graph below shows since 2012 household spending (labelled HHFCE and NPISH) has been the one consistent bedrock of GDP growth in the UK.



In the same month, the Office for Budget Responsibility (OBR) reported that gross household debt was heading back to levels last seen just before the 2008 banking crash. A crash which had as one of its central causes excessive household debt.


And another graph from the “Budget 2014: Background Briefing”, produced by Parliament's impartial House of Commons Library showed how consumption had been rising strongly in recent years despite falling real wages.


Osborne's big idea to get households to spend more without any more income, was that we should spend our assets!

This isn't a totally new idea. Britons have two great stores of assets: our homes and our private pensions.

In the period from 1979 up to the 2008 Banking Crash Britons were helped to withdraw and spend their housing wealth. Data from the Bank of England shows how Home Equity Withdrawal (HEW) boomed following the Tory victory in 1979, and more so in the years of the Labour government leading up to the Credit Crisis:



A report by the Centre for Research on Socio-Cultural Change (part of the University of Manchester and the Open University) observed:

"the remarkable result is that under Mrs Thatcher from 1979-90, just as under Tony Blair from 1997-2007, the real value of Housing Equity Withdrawal is larger than the real value of GDP growth"



Evidently getting Britons to spend their assets isn't new. What is new is Osborne's pension reforms. In the Queen's Speech of 2014 Her Majesty intoned Tory policy as is her duty:

"People aged 55 and over with defined contribution pensions will be able to withdraw their savings as they wish, subject to marginal rates of income tax and scheme rules. No-one will be required to buy a guaranteed lifetime annuity with their pension pot and all other existing restrictions on accessing entitlements will be lifted."
 

People with Defined Benefit (DB) pensions aren't left out, as they can convert their DB pension to a Defined Contribution and then cash it out (though giving up the advantages of a Defined Benefit pension generally makes this a terrible idea). 

We once had little option but to take our pension savings in a dribble over the course of our retirements. Osborne has now given us access to the whole pot in a dollop. The result of all this has been carefully assessed in the 2014 Budget. Tax comes from the flow of money. The HMRC graph below shows a short term tax bonanza, from people cashing in and spending their pensions. Followed by an ongoing trough from people having spent their savings and having to live on less.



Interestingly enough, here is an example where it won't be the poorest who get ripped off. ONS figures show that nearly a quarter of households have no private pension savings at all to be ripped off. Which is not surprising when you consider a report in 2014 by KPMG, the accountancy firm, that stated "The latest figure indicates that 22 percent of employees now earn less than the Living Wage". Living on less than the living wage leaves less than nothing to save in a private pension. 

With the wealthiest able to afford good advice, the juiciest targets for the scammers will be everybody in the upper middle.



To be fair to Osborne, it's not like we weren't getting our pensions ripped off before this reform. The British pensions industry has always ripped us off with high charges and measly investment returns while we save, and with rotten annuities when we retire. David Pitt-Watson, a leading fund manager, said in evidence to Parliament

"If today, a typical young Dutch person and a typical young British person were both to save the same amount for their pension; if they were to retire on the same day, and die at the same age, the Dutch person is likely to get a pension which is at least 50% higher than the British one."

However, having been ripped off by the regulated rogues of The City of London, Osborne has opened the gates for us to be ripped off by their equally evil unregulated twins in the boiler rooms.


Following the standard "Smoking Kills" principal of useless advice, providing the government with the "We did warn you!" parachute, The Pensions Regulator provides a seven page booklet. These seven pages of large print and pictures, according to The Pensions Regulator, provide "the best possible protection against scammers".



The booklet helpfully informs you:
"Scammers don’t care whether you’re an inexperienced investor or have never put your money anywhere other than a bank. They will try to flatter, tempt and pressure you into transferring your pension fund into an investment with attractive sounding returns. Once you’ve signed the forms and the transfer has gone through, it’s too late. You’ll probably lose all your savings and end up with nothing but a hefty tax bill. Remember, the only people who benefit from scams are the scammers themselves" 

How true! And it provides a helpful graphic:

And that seven page booklet, according to The Pensions Regulator, is the "best possible protection against scammers". 

Which is probably true if the alternative is relying on regulation by the Financial Conduct Authority (FCA). Regulators in Britain, from OFGEM to the FSA and FCA, have proved to be terrible at protecting Britons from being ripped-off. You will perhaps be no worse off using the seven pages as a scammer swat.


Thursday, 19 March 2015

Thursday, March 19, 2015 Posted by Hari No comments Labels:
'Chronic underfunding' of social care increases burden on NHS, say GPs
Nine out of 10 GPs believe deep cuts to social care under the coalition have added to the growing overcrowding at both their own surgeries and hospital A&E units. In a poll of 830 family doctors in England, 92% did not think that enough social care is available to stop patients ending up in emergency departments or to avoid them having to stay in hospital despite being medically fit to leave. The Care and Support Alliance, which commissioned the poll, said “chronic underfunding” of social care had increased the burden on the NHS. “The care system is on its knees. The message from GPs is clear – cuts to social care have directly led to extra pressure on primary care as well as huge challenges for hospitals,” said Richard Hawkes, the chair of the CSA, a group of more than 75 organisations working with old and disabled people receiving social care. Councils in England claim £3.5bn has been taken out of the social care system since 2010 as a result of austerity-driven deep Whitehall cuts to many local authorities’ budgets. Some 500,000 people who would have received social care in 2009 no longer qualify for it, despite the ageing population, London School of Economics research has found. GUARDIAN

BUDGET 2015: George Osborne rejects OBR forecast of 'much sharper squeeze on spending'
The chancellor dismissed an assessment by the Office for Budget Responsibility (OBR), the independent watchdog, which found there would be a “much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years” followed by a big increase in spending after that. Osborne insisted he was not proposing deeper cuts but the same pace of cuts as the last five years. The OBR’s judgment about large cuts in the early years of the parliament has also put pressure on Osborne to spell out exactly where his axe is going to fall. He refused to say exactly where £12bn of welfare cuts would come from, beyond freezing payments, saying people would have to look at his approach. GUARDIAN

Tax evasion: French prosecutor demands HSBC's Swiss private bank face criminal trial
HSBC's Swiss private bank has one month to respond, after which French magistrates will decide whether or not to hold a trial. Parent company HSBC also faces a separate, ongoing French investigation. The French newspaper Le Monde reported that HSBC turned down a €1.5bn (£1.07bn; $1.6bn) settlement offer. HSBC faces 10 separate investigations around the world for allegations that it helped wealthy clients avoid paying millions in taxes to governments in the UK, the US, Argentina, France, and elsewhere. The tax evasion came to light as a result of a whistleblower, Herve Falciani, who leaked documents regarding the scheme to the UK's tax authority (HMRC) in 2010. HSBC has since apologised for operations at the Swiss bank, and has said that it has reformed the way it conducts business. BBC NEWS

National Express first transport firm to pledge living wage for all UK workers
The bus, coach and rail operator will become an accredited living wage employer, with hundreds of low-paid workers getting a significant pay rise, including contracted staff as well as employees. Its largest domestic business, the bus division – based in the West Midlands – will pay the living wage from January 2016, with the group ensuring all its staff, including those on the higher London rate, earn above the threshold from 2017. The Living Wage foundation said that around 1,200 firms had now signed up to pay the rate of £7.85 an hour (£9.15 an hour in London), around 20% higher (40% higher in London) than the national minimum wage of £6.50, but National Express was the first private transport group to commit. Research from KPMG last year found that 22% of the working population are paid less than the living wage. GUARDIAN

Monday, 16 March 2015

Monday, March 16, 2015 Posted by Hari No comments Labels: , , , , , , , , , ,


As we all know, the country went into a tailspin following the collapse of the banks, both here and abroad. You can say what you like about the Tory LibDem government's attempts to turn the country around, and the opposition's criticism of it. But one thing is for sure. Whoever is paying for the crisis, it's clearly not our top bankers.

In the first week of March the total pay of the CEOs of our largest banks was revealed. The boss of Lloyds, Antonio Horta-Osorio, got £11.5m, Stuart Gulliver at HSBC got £7.6m, and Barclays’ Antony Jenkins got £5.5m. RBS boss Ross McEwan modestly took £1.85m after voluntarily turning down a £1m bonus, because he “does not want this issue to be a distraction from the task of building a great bank for customers and shareholders.” Surely because he does not want everyone to ask the obvious question: given RBS lost another £3.5bn last year, the seventh year in a row of losses that brings the total to £43bn since the 2008 bailout, how come you were offered a £1m bonus to turn down in the first place?! And how come, overall, RBS handed out £421m in bonuses to its “top” bankers last year?

So, now would be a good time to give a round-up of continuing financial services shenanigans, all taken from the mainstream media both left and right, since January 2014.

It includes...
  • Bank scams, from sneaky mis-selling to outright fraud, from mammoth large to small-ish.
  • The huge fines US regulators have imposed, in contrast with the measly fines we do.
  • Revolving doors: some of the former bank regulators who got hired to advise the banks.
  • Promises, predictions and failures to rein in the banks.
  • The continuing rise of consumer and mortgage debt, which got us into all this trouble in the first place.

Sunday, 15 March 2015

Sunday, March 15, 2015 Posted by Jake No comments Labels: , , , , , , , ,
When asked by a member of the audience in the BBC Question Time programme why MPs had taken a 10% pay increase, Grant Shapps MP said this was "a complete and utter myth". Shapps was correct in a slippery way. That particular Question Time programme was in February 2015, and the bumper payrise wasn't coming in for another couple of months:

a) 1% rise in April 2015 from £67,060 to £67,731
b) 9% additional rise the following month straight after the May 2015 general election, to £74,000. 

Note while Shapps, the Tory party chairman, was being characteristically slippery none of the other three MPs on the panel, from Labour, Liberal Democrat and UKIP stepped in to clarify this.

We have in other posts pointed out that an MP's basic salary is more than the wages of 95% of UK taxpayers. However, putting aside all the expenses and all the 'under the radar' consultancies and directorships, MPs have plenty of opportunities to bolster their incomes with funds from Parliament itself.

Thursday, 12 March 2015

Thursday, March 12, 2015 Posted by Hari No comments Labels:
The rich are 64% richer than before the recession, while the poor are 57% poorer
The gap between richest and poorest has dramatically widened in the past decade as wealthy households paid off their debts and piled up savings following the financial crisis, a report by the Social Market Foundation (SMF) warns. By contrast, the worst-off families are far less financially secure than before the recession triggered by the near- collapse of several major banks. They have an average of less than a week’s pay set aside and are more often in the red. Younger workers have fallen behind older people while homeowners – particularly those who have paid off their mortgages – have become increasingly affluent compared with their neighbours who are paying rent. The SMF’s findings will be seized on by Labour as evidence that any recovery from the downturn is uneven and not shared across all income groups. However, the trends uncovered by the SMF began before the Coalition came to power, underlining the huge impact of the credit crunch on levels of affluence. INDEPENDENT

Privately run Work Programme benefit cuts are a "post code lottery"
The homeless charity Crisis said there is a "post code lottery" of sanctions - when claimants have their payments stopped. The charity provided evidence that there was no correlation between the high sanction rates and bad behaviour by claimants. However Crisis did say that different policies by private sector companies delivering the Work Programme for the long-term unemployed might be a factor. It said sanctions rates varied between 15.4 per hundred claimants per month in Richmondshire, North Yorkshire, and 1.8 per hundred in the Western Isles. Since April 2000, more than six million people have had benefits payments stopped, usually for failing to keep appointments, or demonstrating that they are otherwise not available for work. The rules were tightened in October 2012, following the Welfare Reform Act. Payments can be stopped for four weeks, or as much as three years, depending on how many times the rules are broken. The government has always argued that benefit sanctions act as an incentive to help people find work. BBC NEWS

Rise in Councils using aggressive enforcement and bailiffs to recover debts
Enforcement action “appears to be the norm, not a last resort”, said the debt charity StepChange, after a survey of its clients found that even after speaking to their council about their debts, 62% had been threatened with court action and 51% had been threatened with bailiffs. In contrast, only 25% were offered an affordable payment option and just 13% were encouraged to get debt advice. The charity said it had seen a huge increase in the number of people seeking its help with council tax debt, and the growth was outstripped only by the growth in problems caused by payday loans. StepChange said that in 2010, 13,353 people who contacted it were in arrears to their council, but in 2014 this figure had risen to 63,016 – an increase of 372%. Over the same period the average amount owed rose from £675 in 2010 to £832. Of StepChange’s clients, 28.3% had council tax debt in 2014, compared with 10.4% in 2010. Changes to council tax benefit benefits, the rising cost of living and the tough stance taken by councils were likely to be driving the increase in the number of people seeking help. Mike O’Connor, chief executive of StepChange, said: “It is shocking that many councils are less likely to be helpful to people in debt than banks are, and are more likely to take people to court... Councils need to pursue debts but they must have a responsible and proportionate approach to dealing with people in arrears and not default to aggressive enforcement that often only serves to deepen debt problems.” StepChange said councils were under pressure to collect tax, and were named and shamed based on these rates, but a fall in collection rates in 2013-14 suggested tough enforcement action was not working. It calls for changes to the Council Tax (Administration and Enforcement) Regulations 1992 to force councils to provide evidence that they have tried to pursue an affordable repayment plan, and for consumers to get protection against enforcement of unaffordable repayments if they are seeking help with their debts. GUARDIAN

Barclays board member told to resign over pay awards by UK's largest investor body
A City grandee in charge of handing out bonuses to Barclays directors has been told to step down immediately by one of the UK’s largest investor bodies. The call for the immediate departure of Sir John Sunderland, who is chairman of the Barclays’ remuneration committee, is being made by the Local Authority Pension Fund Forum (LAPFF) – which unites 64 public sector pension funds with combined assets of £150bn. Kieran Quinn, chair of LAPPF, said: “Sir John Sunderland must go from the Barclays board immediately. It is inexplicable how Barclays can have gone back on its promise to the 2014 AGM that Sir John would step down. Having messed up remuneration for 2013, Sir John has in fact stayed on as chair and presided over another year of still unacceptably high pay for 2014, and is still in place in March 2015. It’s nothing short of misleading shareholders.” Last week, Antony Jenkins, the chief executive of Barclays, was forced to defend his £5.5m pay packet as the bank set aside £1.25bn in preparation for a wave of fines and penalties for rigging foreign exchange markets. GUARDIAN

Sunday, 8 March 2015

Sunday, March 08, 2015 Posted by Jake No comments Labels: , , , , , , , ,
It is not just money the poorest get the least of. It is also life itself. Office for National Statistics (ONS) figures show life expectancy drops dramatically in areas of greater deprivation. Perhaps that's not news for many of you.


However, even more dramatic is the drop in the number of healthy years people in the lower deciles of deprivation can expect. (The ONS measures "Healthy Life Expectancy" as the number of healthy years you expect to have over the course of your life, the rest presumably being not healthy).

A male child born between 2011 and 2013 from the top (least deprived) decile can expect:

a) to live 9 years longer than a child from the bottom (most deprived) decile  

Friday, 6 March 2015

Friday, March 06, 2015 Posted by Hari No comments Labels: , , , , , ,
Fee, KJ and Chris figure it all out...

SOURCE GUARDIAN: Incomes return to 2007 levels, but working-age households remain worse off
The Institute for Fiscal Studies (IFS) said average incomes in 2014-15 are about the same as they were in 2007–08, before the banking crisis triggered a deep recession. The average has been lifted because people over 60 are better off. Their average income is forecast to be 1.8% higher in 2014-15 than in 2007-08, but the average income of 22- to 30-year-olds is estimated to be 7.6% lower than before the financial crisis. While pensioners have been hit badly by the rising cost of energy and food in recent years, they have been helped by measures such as the “triple locking” of the state pension, which guarantees it is raised by a certain amount. Household spending power has risen owing to a big drop in inflation and a steady fall in unemployment, the thinktank said. But the recovery has been slower than after the previous three recessions because incomes have been squeezed by weak wage growth, tax increases and benefit cuts. Andrew Hood, an IFS research economist who co-wrote the report, said: “The young have done much worse than the old, those on higher incomes somewhat worse than those on lower incomes, and those with children better than those without.” The IFS said large falls in real earnings (adjusted for inflation) have had a bigger effect on wealthier households, while poorer households, which tend to spend a bigger share of its income on food and energy costs, have been hit harder by the rising cost of living.

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