Recent Articles

Sunday, 21 September 2014

Graphs at a glance: Middle-paying jobs have been disappearing for years. Is that why in spite of the economic recovery, wages are still stagnant?

It used to be the case that when unemployment fell wages rose. Bank of England figures show this has been true up to the last recession, but stopped being true since the recovery that started in 2013. According to Ben Broadbent, a deputy governor of the Bank of England, 

average pay growth [in 2014] is almost 2% points – more than four standard deviations – weaker than the 1993-2012 regression line (Chart 10)."

Statistically “four standard deviations” means this 2% deficit is extremely unlikely to be due to random chance. As James Bond, had his civil service career taken him into the Office of National Statistics, would have put it “four standard deviations is enemy action”.

Thursday, 18 September 2014

Rip-off News round-up. Our pick of the last week's media (Thu 18th Sept)

G4S, Serco: Cancelling “guaranteed profits” probation contracts could cost taxpayers £300m-£400m
Taxpayers will face a £300m-£400m penalty if controversial probation privatisation contracts are cancelled after next May's general election under an "unprecedented" clause that guarantees bidders their expected profits over the 10-year life of the contract. Labour is already committed to unpicking the justice ministry contracts to outsource probation services but will not now be able to do so without incurring the multimillion pound bill because of "poison pill" clauses written in by Chris Grayling's department. The Ministry of Justice say they are only following Treasury guidance by including the clause, which raises the prospect that similar clauses are being included in other politically controversial contracts across Whitehall that are to be signed before next May's general election. Margaret Hodge, the chairman of the Commons public accounts committee, has asked the Whitehall spending watchdog, the National Audit Office, to challenge any politically contentious contracts that are signed in the dying months before the general election: "It is not value for money. It is unacceptable and must be challenged before the event." The disclosure comes as the two outsourcing firms at the centre of serious fraud inquiries, G4S and Serco, confirmed they had been granted new government work during a period when the justice secretary, Chris Grayling, had told MPs that contracts would not be awarded. The confirmation has led to claims that Grayling misled parliament. GUARDIAN

Southeastern handed four-year rail deal despite rating “worst” with passengers
Southeastern has been handed a new four-year deal to run commuter railways in London and Kent, despite having the most dissatisfied passengers of any train operator. The company, run by Govia – a joint venture of Go-Ahead and the SNCF-owned Keolis – was given a direct award without competition to continue services until June 2018. It is the seventh such deal after the West Coast franchising fiasco ripped up the government's timetable for reletting the railways. The Department for Transport said that the operator would be forced to improve services while its subsidy would be cut. But the deal was met with dismay by passenger groups and unions who described it as a "reward for failure". GUARDIAN

Academy schools caught making “questionable” payments to board members
A report commissioned by the cross-party Education Select Committee highlighted potential conflicts of interest where individuals on trust boards could benefit personally or through their companies from their position. One anonymous interviewee told the researchers about an academy “where the headteacher had spent £50,000 on a one-day training course run by their friend” – a decision which was not run past the governors. Another example cited in the report was that Academy Enterprise Trust, which runs 80 schools, has paid nearly £500,000 to private businesses owned by its trustees and executives over the past three years for services ranging from project management to HR consultancy. The report said a range of “questionable practices” by academies were being signed off because existing rules were not strong enough. In another academy, “the chair of governors had told all staff that if they discussed with students or used text books referencing abortion or contraception they would be dismissed”. The researchers’ report said: “The ability of the system to pick up on intangible conflicts that do not involve money seems almost non-existent.”INDEPENDENT

Tories charge £2,500 a head for access to ministers at party conference. Labour and LibDems are doing it too
The Conservatives are charging business executives and lobbyists £2,500 each for access to David Cameron, George Osborne and other ministers at their party conference in Birmingham this year. The paying guests will attend the conference's "business day", which will include lunch with the prime minister and dinner with the chancellor. They will also have a chance to talk to ministers about their specific concerns in "policy break-out" sessions. Companies sending representatives are able to avoid disclosing if they have bought a table because parties are allowed to class the cash as fees received as part of a commercial transaction, rather than a political donation. Political donations of more than £7,500 have to be reported to the Electoral Commission. The Tories are not the only party to sell access to their frontbench. Labour is also marketing a "business forum package" for its conference in Manchester that includes breakfast, lunch and a guaranteed place at its business reception for just under £1,300 a head. It also classifies the cash as a commercial transaction. The Liberal Democrats are selling tickets for their business day at £800 each and for their business dinner at £350. The party's conference website describes the event as "an excellent occasion for business leaders and public affairs executives to meet senior Liberal Democrats and discuss the current issues, challenges and opportunities facing British businesses today". GUARDIAN

Saturday, 13 September 2014

Graphs at a glance: How policy makers use averages to rip-off half the population

In an earlier post we pointed out that London is sucking the life out of the UK. Were we being fair?
It is certainly true that London has a greatly disproportionate share of the UK's economic activity.

One consequence is things in London cost more, from the price of a pint to the price of a house
So are people in London paid more than in the rest of the UK so they can afford higher "London Prices"?

Well, yes and no.

On average Londoners are paid more: 15% more than the UK average.  
But take a closer look, and the story is different.

Thursday, 11 September 2014

Rip-off News round-up. Our pick of the last week's media (Thu 11th Sept)

MPs' pay rise of 9% 'should go ahead'
Marcial Boo, chief executive of the Independent Parliamentary Standards Authority (Ipsa), said MPs did an important job and should not be paid a "miserly amount". Their pay will go up from £67,000 to £74,000 under Ipsa's plan. The PM, Nick Clegg and Ed Miliband called the hike unacceptable when it was proposed at the end of last year. The Conservative, Liberal Democrat and Labour party leaders argued it would be wrong when public sector pay rises were capped at 1%. But speaking to the Sunday Telegraph in his first interview since taking on the job, Mr Boo said a review of evidence had shown that economic forecasts were improving while MPs' salaries had "fallen behind" others working in comparable public sector roles. The proposed £74,000 figure was now seen by some as being "at the low end", he claimed, adding that pay needed to be fair to attract good candidates. The one-off increase is part of a package that will see MPs pay more into their pensions, as well as the end of resettlement payments. Ipsa says that overall the reforms will not cost taxpayers any more than the present scheme. BBC NEWS

Bedroom tax bill splits coalition as Lib-Lab pact forces second reading
David Cameron's authority received a damaging blow on Friday when a Liberal Democrat-sponsored bill aimed at modifying the bedroom tax was voted through to the next stage in parliament after dozens of Tory MPs ignored whips' demands to vote with the government. Labour MPs joined with the Tories' coalition partners to send the affordable homes bill, sponsored by Andrew George MP, through to a second reading vote by 306 to 231. Seventy Conservative MPs ignored a three line whip and stayed away from Westminister. Angie Bray, Tory MP for Ealing Central and Acton, voted against her party. Usually, the government can rely on a majority of more than 60. Social housing tenants judged to have too much living space have had their housing benefit cut since 1 April 2013, under a proposal known as the spare room subsidy by the government, but widely known as the bedroom tax. However, a shortage of smaller available homes has meant large numbers have been unable to move to cheaper accommodation yet still suffered the cut. If passed, the new bill would mean people who cannot be found a smaller home would be exempt from the cut in housing benefit. Disabled people who need a spare bedroom or who have had their homes adapted would be exempt. GUARDIAN

House builder Barratt doubles annual profits on back of Help to Buy scheme
The chief executive, Mark Clare, said: "Following the launch of Help to Buy, sales rates over the summer period last year were exceptionally strong. This year we have seen a return to more normal seasonal trends." The mortgage-subsidy scheme has given housebuilders a huge boost since it was introduced in April 2013. Barratt's profits soared to £390.6m in the year to 30 June. The private average selling price climbed 12.9% to £241,600, partly reflecting Barratt's move away from building flats to larger family homes since the downturn. The company completed 14,838 houses – 8.6% more than in the previous year (13,600). The builder expects to construct 15,700 homes in the current year, a slightly slower rate of increase. The Help to Buy scheme accounted for 30% of Barratt's sales last year, and 35% for Redrow, another major housebuilder. Help to Buy, which was due to end in 2016, has been extended to 2020. GUARDIAN

Sports Direct faces action from zero-hours staff over bonus scheme
Sports Direct, the retailer founded by billionaire Mike Ashley, is facing legal action from 250 workers excluded from a multimillion-pound bonus scheme because they were on zero-hours contracts. Lawyers acting for the part-time staff are preparing to file multiple claims for breach of contract at the high court. The employees were excluded from a bonus scheme that paid out about £160m worth of shares to 2,000 "permanent" workers in 2013. The claims, which have been gathered in partnership with workers' rights group Pay Justice, could amount to a £4m-plus bill for Sports Direct. The retailer has been widely criticised for employing nearly 90% of its staff on zero-hours contracts, which do not guarantee a minimum number of working hours a week and also fail to provide for annual leave and sick pay. Elizabeth George of law firm Leigh Day, which will lead the claims, said: "These are the staff whose hard work over many years has brought about the record profits that funded the bonus awards in the first place. It's plainly unfair that they should have missed out... We believe that they had a contractual right to the bonus because regardless of the zero-hours label that the company has given their contracts, they were all permanent employees of the company for the necessary number of years." Many of those taking part in the action continue to be employed by Sports Direct. Pay Justice is encouraging any other staff who believe they might be eligible to make contact via its website. GUARDIAN

Sunday, 7 September 2014

Graphs at a glance: Government increases the percentage of female police officers! By sacking male officers faster than they sack female officers!!

Question: How do you INCREASE the percentage of women in the police force while DECREASING the number of women in the police force?

Answer: You decrease the number of policeMEN faster than you decrease the number of policeWOMEN.

For example, if you have 20 women and 80 men, then 20% are women (20 out of a total 100 people). If you reduce the number of men such that you have 20 women and 20 men the percentage of women goes up to 50% (20 out of 40 people).

The House of Commons Library,  which provides impartial research for MPs, produced their "Social Indicators" report in September 2014. This report shows:
  • Total police numbers fell by 15,825 between 2010 and 2014
Of these officer cuts:
  • 1,335 were female
  • 14,490 were male
As a result the percentage of women officers rose from 26% in 2010 to 28% in 2014.