Tuesday, 20 September 2016

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

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


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

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

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

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

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

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

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

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

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

Thursday, 15 September 2016

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

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

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

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

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

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

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

Thursday, 1 September 2016

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

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

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

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

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

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

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

Thursday, 18 August 2016

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

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

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

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

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

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

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

Thursday, 4 August 2016

Thursday, August 04, 2016 Posted by Hari No comments Labels:
Student debts wipe out most graduate pay premiums
Politicians should stop using a "carrot of higher graduate earnings" to justify raising student fees or freezing repayment thresholds, say campaigners. Those who do "should be charged with gross mis-selling", says Angus Hanton, co-founder of the Intergenerational Foundation (IF) lobby group. Having to pay back student debts will wipe out any graduate premium for most professions, claims the IF in a report. The report points out how successive governments have used the graduate "pay premium" to justify them. The premium is the amount of extra money it is estimated a degree can help graduates to earn over the course of a lifetime. The report says that in 2002, ministers put it at £400,000, but recent estimates have been more modest at about £100,000. There are wide variations between the sexes and between subjects and institutions, it adds. It argues that, while for somebody who gets an Oxbridge first, the premium figure of £400,000 "may still hold true", it is much lower for non-Oxbridge graduates. "The increasing number of graduates... is further undermining the value of a degree," it adds, with some previously low-to-median paid posts now requiring degrees. "Our research proves that the current £100,000 graduate earnings premium so often touted equates to an 'annual bonus' of just £2,222 over 45 years of work and is wiped out once National Insurance and income tax are taken into account. "Furthermore, the premium is simply not enough to cover the interest accruing on the average loan. "The current system is fuelling a self-perpetuating debt-generating machine which short-changes young people," argues Mr Hanton. The authors say a graduate who borrowed the maximum for tuition fees and maintenance would, with interest, owe £53,000 after three years. In addition, unlike most ordinary loan agreements, the terms and conditions of student loans can be changed "at any moment without debate and without notice", they add. They point out that the government has already broken a promise that the income threshold for repayments would increase with average earnings from April 2017. Instead, it will be frozen at £21,000 for five years, then Chancellor George Osborne announced in November 2015. BBC NEWS

Councils must resume house building role, says LGA
Councils should be given the chance to resume their "historic role" as house builders to ease an affordable housing crisis, their lobby group says. The fall in home ownership among the young and rising rental costs has led to some calls for councils to step in to increase the supply of homes with a new building programme. Between the late 1940s and late 1950s councils built more homes than the private sector. Local authorities were building 100,000 homes a year up to the late 1970s, but the election of Margaret Thatcher's Conservatives in 1979 led to a fall in housebuilding by local authorities. In the year to the end of June, local authorities built 1,500 homes in England out of a total of 131,370 - that is just over 1%. The need was even greater following the economic uncertainty caused by the UK's vote to leave the EU, the Local Government Association (LGA) said. Peter Box, LGA housing spokesman, said: "The private sector clearly has an important role to play but the reality is that it cannot build the homes we need on its own, and will likely be further restricted by uncertainties in the months and years ahead." A separate report from the Centre for Economics and Business Research suggests that "tremors" from the vote to leave the EU will not prevent the average UK home costing about £40,000 more in five years' time. This would push up the average UK house price from £194,000 in 2016 to £234,000 in 2021, it predicted. BBC NEWS

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece
The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory. This is the lacerating verdict of the IMF’s top watchdog on the fund’s tangled political role in the eurozone debt crisis. The three main bailouts for Greece, Portugal and Ireland were unprecedented in scale and character. The trio were each allowed to borrow over 2,000pc of their allocated quota – more than three times the normal limit – and accounted for 80pc of all lending by the fund between 2011 and 2014. In an astonishing admission, the report said its own investigators were unable to obtain key records or penetrate the activities of secretive "ad-hoc task forces". “Many documents were prepared outside the regular established channels; written documentation on some sensitive matters could not be located. The IEO in some instances has not been able to determine who made certain decisions or what information was available, nor has it been able to assess the relative roles of management and staff," it said. A sub-report on the Greek saga said the country was forced to go through a staggering squeeze, equal to 11pc of GDP over the first three years. This set off a self-feeding downward spiral. The worse it became, the more Greece was forced to cut. The result is that nominal GDP ended 25pc lower than the IMF’s projections, and unemployment soared to 25pc instead of 15pc as expected. “The magnitude of Greece’s growth forecast errors looks extraordinary,” it said. The injustice is that the cost of the bailouts was switched to ordinary Greek citizens  – the least able to support the burden  – and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness – the root of so much bitterness in Greece – is finally recognised in the report.  “If preventing international contagion was an essential concern, the cost of its prevention should have been borne – at least in part – by the international community as the prime beneficiary,” it said. TELEGRAPH

Maintenance grants scrapped for poorest students
From Monday, the grants, worth about £3,500, will be replaced with additional loans that will have to be paid back at the end of an undergraduate course, once graduates earn more than £21,000. Sorana Vieru, National Union of Students (NUS) vice president, told BBC Breakfast: “It’s a disgraceful change that basically punishes poorer students simply for being poor, so they have to take a bigger loan than those students from privileged backgrounds. The change, announced by the then chancellor, George Osborne, in 2015, was opposed by Labour, which said it would hit those from low-income homes the hardest. Speaking in January, Jo Johnson, the universities and science minister, said the maintenance grant change “helps balance the need to ensure that affordability is not a barrier to higher education, while ensuring that higher education is funded in a fair and sustainable way”. GUARDIAN

Home ownership falling in major English cities
The proportion of home owners dropped from 72% in April 2003 to 58% this year in Greater Manchester, it said. West Yorkshire, the metropolitan area of the West Midlands and outer London have also recorded double-digit falls. Explaining the falling rates of home ownership, Matthew Whittaker, chief economist from the Resolution Foundation, told the BBC's Today programme: "What we particularly have seen since 2002-03 is that incomes simply haven't kept pace with house prices, so it's not just that house prices have gone up.” The average first time buyer paid just under £30,000 for their new home in the 1980s compared with more than £150,000 now, the think tank said. The report follows recent data from the government's English Housing Survey showing the total number of buyers has fallen by a third in 10 years, and those who do buy their first home increasingly rely on the bank of mum and dad for help. The Resolution Foundation's analysis of the LFS found that home ownership in England peaked in 2003 at 71% of the population and had now dropped to just under 64%. The think tank also confirmed that the fall in ownership corresponded with a rise in renting from private landlords. The proportion of private tenants rose from 11% in 2003 to 19% last year, it said. In Greater Manchester, the move was more pronounced - rising from 6% to 20% over the same period. While accepting that home ownership was rather a national obsession, it pointed out that those in the private rented sector spent more of their income on housing than their owners, and there was more insecurity in short-term tenancies. BBC NEWS

Carphone Warehouse ad claiming 'UK'S LOWEST PRICES - WE CHECK SO YOU DON'T HAVE TO' is banned
Carphone Warehouse has been forced to pull an advert for its monthly 4G mobile tariff packages, after the UK's advertising watchdog branded it 'misleading.' The Advertising Standards Agency said the small print contradicted the advert's claims, which it found could not be substantiated. Under the advert, the small print said: 'UK's Lowest Price on pay monthly is based on new connections on selected networks on 4G tariffs. UK's Lowest Price correct at time of print and it applies to published prices ... Excludes all online retailers without high street presence and other promotional offers ....'. Text next to a number of phones pictured alongside the advert stated 'AT THE BEST PRICE' and 'AT THE BEST PRICE WE'VE CHECKED.' Further small print at the bottom of the advert said: 'If you find an upgrade or pay monthly deal for less at O2, EE or Vodaphone, we'll match it and pay the equivalent of your first month's standard line rental ....' The offer excluded 'all online retailers without a high street presence', so shoppers were 'likely to be misled' by the advert, the ASA said. The price promise also only applied to three competitors, namely O2, EE and Vodafone, so the advert 'contradicted the overall impression that Carphone Warehouse prices were better than all other retailers', the ASA said. DAILY MAIL

Goldman Sachs fined $36.3m over use of “improperly obtained” confidential documents
The Fed said Goldman Sachs had used documents, obtained by a former Fed employee, to brief clients during presentations. Goldman Sachs has already paid New York regulators $50m over the same incident. The case has highlighted the issue of staff moving between big banks and the agencies that regulate them. According to the Fed, a former Goldman Sachs senior banker Joseph Jiampietro, asked a new, junior employee Rohit Bansal to obtain confidential documents from the Fed, where Mr Bansal had previously worked for eight years. Those documents were then used to advise small and medium-sized banks on the Fed's decision making in 2014. Both Mr Jiampietro and Mr Bansal were sacked after another colleague reported the incident to the compliance department. BBC NEWS

Luxury property tycoon says lavish gifts to brother were for 'love' not tax evasion
Christian Candy has insisted he gave his brother Nick gifts worth more than £200m out of family affection and respect for the dying wishes of their late father — and not as part of an alleged plot to evade tax. The largesse Christian handed to his business partner brother include a penthouse apartment at One Hyde Park, where Nick lives with his pop singer wife Holly Valance; the couple’s future family home, a grade II-listed mansion in Chelsea; and £10m in cash. Loans from Christian’s business empire have also been used, in part, to help Nick buy a £26m, 60-metre Italian yacht called 11-11. The multi-millionaire brothers, who are Conservative party donors, have been forced to provide a rare glimpse into their relationship — both business and personal — as part of a bitter legal dispute over a loan to another property developer, Mark Holyoake. They say Holyoake is making allegations about tax evasion to force settlement of his claim and detract from business problems of his own. Witness statements from Nick and Christian Candy were submitted to the high court in London after questions were raised about how Nick came by his personal fortune, and the role he played in his brother’s CPC Group. A highly profitable property empire, CPC — which takes its name from Christian’s initials — is best known for super-luxe London developments such as One Hyde Park, where the sale of apartments brought in £2bn. GUARDIAN

Thursday, 21 July 2016

Thursday, July 21, 2016 Posted by Hari No comments Labels:
Firms back Theresa May's attack on runaway executive pay
Business leaders have given a resounding endorsement of Theresa May’s proposals to shake up corporate governance and put pressure on runaway levels of executive pay. In a new poll by FTI Consulting, seen exclusively by City A.M., 81 per cent of senior figures from small, medium and large companies backed a tougher government stance on how the UK’s largest companies are run. Theresa May pledged last week to put big businesses under the microscope as prime minister, announcing her intention to introduce completely binding shareholder votes on executive pay and force companies to publish their pay ratios — the difference between the salary of the average worker and the top earner. In further departure from previous Conservative policy, she also signalled support for employee representation on boards and stricter controls over foreign takeovers of UK firms. CITY AM

Millennials to become first generation to earn less than their predecessors
The Resolution Foundation found that under-35s earned £8,000 less in their twenties than Generation X workers. The thinktank defines Generation X as those born between 1966 and 1980 and millennials as those born between 1980 and 2000. If wages for millennials follow the same path as Generation X, average career earnings will be about £825,000. That would make them the first generation to earn less than their predecessors over the course of their working lives. Its research found that some of the pay squeeze was due to under-35s entering the job market as the recession hit, but it also concluded that generational pay progress had ground to a halt even before the financial crisis struck in 2007/8. Torsten Bell, director of the Resolution Foundation, said: "We've taken it for granted that each generation will do much better than the last - earning more and enjoying a higher standard of living. But that approach risks looking complacent given the realities of recent years and prospects for the future." The research comes as Prime Minister Theresa May warned last week of a growing divide between a "more prosperous older generation and a struggling younger generation". The think-tank also found that millennials will have spent £44,000 more on rent by the time they reach 30 compared to the baby boomers, and £25,000 more than Generation X. BBC NEWS

PM urged to launch inquiry into low pay of "self-employed" Hermes couriers
Frank Field MP, chairman of the powerful House of Commons work and pensions select committee, said the government should review HM Revenue and Customs (HMRC) criteria that allow companies to contract work to self-employed individuals rather than hire them as employees. Referring to Theresa May’s first speech as prime minister, in which she said she would legislate for “families who are just managing” and people who “have a job but … don’t always have job security”, Field said: “This is a really good chance for [May] to start this new approach. This [issue with self-employment] is undermining government policy which is to raise wages at the bottom.” The Guardian obtained information about the earnings, hours and expenses of couriers for Hermes, which delivers parcels for retailers including John Lewis, that indicated some were earning below the national living wage of £7.20 per hour for people aged 25 and over. However, because the couriers are self-employed and not covered by the national living wage, the arrangement is legal. The general secretary of the TUC, Frances O’Grady, has also called for reform. “This isn’t just one company,” she said. “The rise of bogus self-employment is hitting people’s incomes and job security across the country.” Field’s call came as the Citizens Advice Bureau revealed a marked increase in the number of people coming forward with concerns about self employment and employment status. One case involved a childminder who worked set hours, five days a week but was hired on a self-employed basis and told she needed to start saving up for her own holiday pay and sick pay. Another case involved a pub employee whose landlord had told him his work was finished unless he switched to self-employment. The man was worried he would no longer receive holiday and sick pay or a steady wage and working pattern. The UK’s self-employed workforce has grown by 800,000 to 4.7 million since 2008, according to official figures. As many as two-thirds of self-employed workers in the transport sector, which includes couriers, delivery drivers and Uber taxi drivers, now earn below the national living wage. GUARDIAN

Uber faces legal challenge from drivers demanding basic rights including holiday pay, sick pay and minimum wage
Two test cases, brought by drivers James Farrar and Yaseen Aslam at Central London Employment Tribunal and supported by the GMB union, argue they should be entitled to holiday pay and receive at least the national minimum wage. Uber claims it is a technology company rather than a taxi firm, and allows people to be their own boss and work flexibly. In his statement Mr Farrar said Uber claimed it had paid him £13.77 an hour on average for the hours he has logged in the app. But he said his earnings for August last year after expenses came to just £5.03 an hour - below what was then the national minimum wage of £6.70 for those over 21. David Reade QC, representing Uber, argued drivers have a choice about their work, there is nothing to force them to work exclusively for Uber, and they are free to work with other private hire operators. But Mr Farrar said Uber controls him 'very, very carefully', logging him out of its system if he ignores two bookings - which Mr Reade said only happens if a driver dismisses three consecutive jobs - and puts him in a 'penalty box' for 10 minutes, also sending him warnings if he does not take jobs, all of which he said would make doing extra work for another company unrealistic. Mr Farrar also explained he had to be 'very, very careful' about deciding whether to take jobs: he had been physically assaulted twice, racially abused once and verbally attacked many times while working as an Uber driver. But he said that even if drivers cancel jobs over safety fears they are penalised. He told the tribunal: 'Sometimes you have to choose between your own safety, your own life sometimes, and doing this job.’ DAILY MAIL

First-time buyers half as likely to be single as 20 years ago
Figures from the latest English Housing Survey show that in 2014-15 just 14% of first-time buyer households were made up of single people, compared with 29% in 1994-95. The change comes despite growth in people living alone, which the Office for National Statistics said accounted for 29% of UK households in 2015. Over the same 20-year period, the share of the market that comprised couples rose from 63% to 80%, and the proportion of couples with children increased from 20% to 31%. The remaining 6% of buyers were loan parents or those buying in larger groups. The majority of first-time buyers were aged between 25 and 34, but the average age increased from 30 to 33, and the proportion of new buyers aged between 35 and 44 almost doubled – from 11% to 20%. The increase in average ages may also mean that people are more likely to be in a couple before they buy. The survey shows that the number of first-time buyers dropped from 564,000 in 1994-95 to 300,000 in 2014-15 despite an increase in the number of households in the same period. First-time buyers were especially hit by the credit crunch in 2008, with banks and building societies withdrawing mortgages for those with small deposits, but they have come back into the market since the government’s help-to-buy scheme was launched in 2013. The housing charity Shelter said: “More and more people on ordinary incomes have no choice but to face a lifetime of expensive, unstable private renting, unless they’re lucky enough to have help from friends and family.” GUARDIAN

Rail minister Claire Perry quits after admitting she feels 'ashamed' about chaotic train delays
Claire Perry quit the Government today just two days after admitting she felt 'ashamed' to be in charge of Britain's railways because of the chaotic delays hitting London commuters. She resigned from her post at the Department of Transport before new Prime Minister Theresa May had time to sack her. Mrs Perry, MP for Devizes, has been the public face of anger over delays at crisis-hit Southern Railway. She has repeatedly refused demands to strip Govia Thameslink Railway of owning Southern Railway despite services being hit by high levels of staff illness, crew availability, walkouts by the rail union RMT and bitter disputes over guards' responsibilities. Commuters have reported losing their jobs and missing out on seeing their kids, as a result of the chaos - which saw the embattled operator cancel at least 341 services every day. They staged a protest earlier this week after Ms Perry appeared to reject their calls to renationalise the line. The beleaguered rail operator introduced its emergency timetable yesterday – axing 341 services a day to avoid ad hoc cancellations – as it struggles to cope with a union dispute and a series of 'sickie strikes'. DAILY MAIL

U.S. charges two British HSBC executives over $3.5 billion forex scam
Mark Johnson, HSBC's global head of foreign exchange cash trading in London, and Stuart Scott, its ex-head of cash trading for Europe, the Middle East and Africa, were charged in a criminal complaint filed in federal court in Brooklyn. Both men were charged with wire fraud conspiracy, in a case that a person familiar with the matter said was the first against individuals to flow out of a U.S. Justice Department probe of foreign-exchange rigging at global banks. Prosecutors said Johnson, 50, and Scott, 43, misused information provided by a client who had hired HSBC to convert $3.5 billion to British pounds in connection with a planned sale of one of the unnamed company's subsidiaries. The two British citizens then used their insider knowledge to engage in a process called front-running in which they made trades ahead of the December 2011 transaction, resulting in a spike in the price of the currency that was detrimental to HSBC's client, prosecutors said. "Ohhh, f---ing Christmas," Johnson told Scott in a recorded call the day the transaction went through, the complaint said. In total, HSBC earned $3 million from trades its FX traders placed and earned $5 million executing the transaction, the complaint said. "The defendants allegedly betrayed their client's confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank," Assistant Attorney General Leslie Caldwell said in a statement. The case was, according to a source, related to a years-long Justice Department probe that has led to four banks last year pleading guilty to conspiring to manipulate currency prices. The charges came a day after the Federal Reserve Board said it was banning Matthew Gardiner, a former FX trader at Barclays and at UBS, from participating in the banking industry for manipulating pricing benchmarks. HSBC was not among the four banks that pleaded guilty, but in 2014 agreed to pay $618 million to resolve related probes by U.S. and British regulators. The Justice Department has continued to investigate, and HSBC has set aside $1.2 billion to cover various forex-related probes, according to a regulatory filing. REUTERS

Sunday, 17 July 2016

In his first tweet after being sacked as Chancellor of the Exchequer, George Osborne chirped "Others will judge - I hope I've left the economy in a better state than I found it".

It so happens two weeks earlier the excellent Andy Haldane, executive director at the Bank of England, made his judgement. The date is important, as Osborne was still sitting confidently on his stool in the Treasury, so Haldane wasn't simply knifing a political corpse. Haldane was speaking truth to power, as so many others who should be doing so had long since ceased.

Haldane's speech in June 2016, titled "Whose Recovery?", should be essential reading in particular for the revolting Labour MPs. The speech offers them an insight into why the ordinary Labour Party membership backed Jeremy Corbyn. And why the Labour Party actually is a party of protest, both in Government and in Opposition. 

The Golden Rule states "Whoever has the Gold makes the Rules". Whether in Government or in Opposition, the Labour Party should represent those without the Gold, and should act as a counterbalance to those who make the Rules even when it is in Government. Because when the Labour Party was not a party of protest, it became the de facto Tory Party (a.k.a. "New Labour"). In truth, had Tory leaders during the Blair years been brighter they could have more quickly undermined Blair by supporting, not opposing, his policies.

Britain needs strong parties of all complexions, from left to right. Regime change in the Tory Party is done with ruthless corporate efficiency, while in the Labour Party it is done with all the blood and broken noses of a pub brawl. Both methods are fine, so long as both emerge representing their members.

Haldane, a product of state school and redbrick university, whether he is in an oak panelled room or in a whitewashed community centre listens to what he hears and  he sees what he looks at. Listening and seeing are talents sadly missing in the revolting Labour MPs. 

In his speech Haldane says:
"I began by speaking about the UK’s economic recovery.  I never got as far as the improvement in the jobs market or surging confidence.  I was stopped in my tracks by a forest of furrowed brows and a phalanx of probing questions, not all of them gentle.  “What exactly do you mean by recovery?” one asked.  “My charity is dealing with 50% more homeless people than three years ago.”   Every other charity in the room had similar stories to tell.  Whether it was food banks, mental health problems or drug addiction, all of the numbers were up.  The language of “recovery” simply did not fit their facts."

We leave it to Haldane to explain whether Osborne left the economy better than he found it, and why ordinary Labour Party members support Jeremy Corbyn:

1) Haldane points out that the UK economy as a whole can improve by making the rich slightly richer and the poor much poorer:

2) Regional income inequality has widened.
Haldane says:
"Another notable pattern in regional income gains and losses is that the largest gains have come in regions where income was already high – London (incomes more than 30% above the UK average) and the
South-East (14% higher). Contrarily, some of the larger losses have been in regions where income was already-low – Northern Ireland (18% lower than the UK average) and Yorkshire and Humberside (14% lower). Put differently, since the crisis the regional distribution of incomes has widened."

3) In recent years the rich have been given more and the poor have been made poorer. Haldane says: 
"in a subjective well-being sense, there may have been no recovery in the UK over the past few years"

He states:
"aggregate GDP figures may over-state somewhat the impact of the recovery on societal well-being: gains by the already-rich boost well-being by less than equivalent losses by the already-poor. To demonstrate that, Chart 12 plots an illustrative measure of “social welfare”. "
3) The recovery from the 2008 recession has been the slowest in decades:

4) By 2015 GDP per person was only 1% above pre-crash levels.
5) The GDP figure includes all UK income, including that which is sent overseas. Office for National Statistics figures show over half of UK quoted shares are owned by the 'rest of the World'. Illustrating how boosting company profits by holding down wages isn't good for Britons.
% of UK stock market owned by "rest of the World"
Haldane states that in terms of GDP per head that is actually kept in the UK there has been no recovery:

6) The "jobs recovery" has not been a "wages recovery". Noting that more people are in poorer paying jobs, Haldane states: 
"Although the recovery of the past few years has been jobs-rich, it has been notably pay-poor."
Haldane goes on to say:
"This is the longest period of flat or falling wages since at least the middle of the 19th Century". 

7) Bank of England and Office for National Statistics figures for 2015 show that in fact only London and the South East have passed their pre-crash peak. Haldane says:
"For example, in Northern Ireland GDP per head remains 11% below its peak, in Yorkshire and Humberside 6% below and here in Wales 2% below."

8) When it comes to Wealth, Haldane says:
"If we turn from income to wealth, the picture is much the same...This has risen across all regions. But the pattern is again uneven, with the largest gains in London (47%) and the South-East (25%), whereas in Wales the gains are smaller (8%) and in the North East there has been a small fall in wealth. 
"..these gains have come principally from rises in property and pension wealth. In other words, the gains have been skewed towards those in society who own their own home or who have sizable pension pots."

Andy Haldane says in this speech:
"The rising economic tide has not lifted all boats. Indeed, a sizable fraction of households have seen no recovery in their disposable incomes, a rise in job insecurity and at best modest rises in their wealth. For them, the “recovery puzzle” may not be so puzzling. These data also suggest that distributional factors may be important when understanding “whose recovery”. "
"This has been an uneven economic recovery, looking across regions, income and age cohorts. Large parts of the UK – many regions, those on lower incomes, the young, renters - have not experienced any meaningful recovery in their incomes or in their wealth."

The revolting Labour MPs desperately hope to cling to their well compensated jobs. The poor things have invested years sucking up to one set of leaders, only to find them chucked out and replaced by Jeremy Corbyn of all people! Probably Corbyn has so little support among the MPs because nobody had bothered licking their spittle onto him.

Labour MPs need to emulate Andy Haldane. Instead of cloaking themselves in self-importance, convinced that only they can "save the Party", they need to go out and see what they look at, and listen to what they hear.  

Labour MPs must stop peeping out of the windows of their Westminster Chambers, demonising their own party members. 

Instead of plotting engrossed in their Westminster mutual admiration society, they need to understand the reasons why Labour Party Members around Britain overwhelmingly supported Jeremy Corbyn.

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