Rip-off News round-up. Our pick of the last week's media (Thu 20th March)

FirstGroup to be handed Great Western mainline on the cheap

FirstGroup looks set to run the Great Western mainline until the next decade without facing a franchise competition – having earlier handed back its contract to avoid hundreds of millions of pounds in premium payments to the government. Last September the government sparked outrage by awarding first a six-month extension and then a two-year direct award to First for rail services west of London for an annual sum of £32m – a fraction of the £800m due under the terms of the original franchise. The shadow transport secretary, Mary Creagh, said the deals would leave a £300m hole in the DfT's finances. She said: "Ministers have now quietly announced another sweetheart deal with First Great Western Group, no doubt at rock-bottom prices, in stark contrast to their unwanted refranchising of the east coast line, run by a not-for-profit public operator which last year returned £191m to taxpayers." GUARDIAN

UK Statistics Authority says Government claim that Legal Aid barristers earn £84,000 is 'misleading'

In a critical letter to the Ministry of Justice, Sir Andrew Dilnot said the government ignored lower estimates to justify £220m cuts to the legal aid budget in England and Wales. The government figure was published days before a protest by barristers in January. The government said it stood by its figures. On Tuesday, Sir Andrew - who leads the body which monitors the integrity of official statistics - wrote to Legal Aid minister Shailesh Vara and courts saying the report did not specify how the government figure was reached. He said the sum was "potentially misleading" as it was not made clear barristers would have to pay costs and tax out of this. Using a different way of calculating the figures would have produced a lower average, he added. The Criminal Bar Association (CBA) disputes the claim, saying barristers actually earn an average of £37,000. BBC NEWS

Income inequality leads to slower economic growth - IMF economists

Income inequality can lead to slower or less sustainable economic growth, while redistribution of income, when measured, does not hurt and can even help an economy, IMF staff found in a research study. Although the study by International Monetary Fund economists does not reflect the Fund's official position, it is another sign of a shift in its thinking about income disparity. "It would still be a mistake to focus on growth and let inequality take care of itself, not only because inequality may be ethically undesirable but also because the resulting growth may be low and unsustainable," according to the study. It has traditionally advised countries to promote growth and reduce debt, but has not explicitly focused on income inequalities. But in the past year, IMF Managing Director Christine Lagarde has said that creating economic stability is impossible without also addressing inequality. REUTERS

Osborne plans to take 'pay now, argue later' approach with rich tax avoiders

More than £5bn in disputed tax liabilities will be dragged out of the bank accounts of tax avoiders and restored to Treasury coffers, the chancellor claimed. George Osborne hopes a tougher "pay now, argue later" approach to more than 30,000 of the richest and most sophisticated tax avoiders in Britain will help HM Revenue & Customs deal with its costly backlog of dispute cases, while generating revenues to fund measures announced elsewhere in the budget. Among the highest profile avoidance schemes in HMRC's sights are so-called film partnership investments – popular with celebrities, footballers and investment bankers – which generate losses which can be offset against income. GUARDIAN

Osborne cracks down on stamp tax-exempt wealthy 'buy-to-leave' investors

Anyone buying a property for £500,000 or more through a company structure now has to pay a 15% stamp duty charge. The role of overseas investors in stoking London house prices has been a hot topic in recent months. Miles Shipside from the property website Rightmove said some people trying to buy average-priced homes in the capital had been at a disadvantage to investors using corporate structures to escape tax. GUARDIAN

Tory education secretary Michael Gove takes aim at Cameron’s Etonians

Michael Gove, education secretary, has described as “ridiculous” and “preposterous” the concentration of Old Etonians in David Cameron’s inner circle, saying such a bastion of privilege does not exist in any other rich country. Mr Cameron, who went to Eton, numbers four Old Etonians among his inner circle: Oliver Letwin, minister for government policy; Jo Johnson, head of his policy unit; Ed Llewellyn, chief of staff; and Rupert Harrison, George Osborne’s chief economic adviser. Mr Gove drew comparisons between Mr Cameron’s team and the cabinet of the Eton-educated Tory prime minister Robert Gascoyne-Cecil, who was criticised for alleged nepotism and cronyism. “At the beginning of the 20th century, the Conservative cabinet was called Hotel Cecil,” Mr Gove said. “The phrase ‘Bob’s your uncle’ came about and all the rest of it. It is preposterous.” Mr Gove, himself educated at a fee-paying school in Scotland, this month became the first Conservative education minister to send his child to a state secondary school. FINANCIAL TIMES

Bank of England report overturns economic orthodoxy: private banks DO print money

A report by three economists from the Bank of England’s Monetary Analysis Directorate states outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. The conventional view, which continues to be the basis of all respectable debate on public policy, is that people put their money in banks which then lend that money out at interest. Furthermore, the “fractional reserve system” permits banks to lend out a multiple of what they hold in reserve. What the Bank of England economists admitted this week is that none of this is really true. To quote from its own initial summary: "Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits". In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This in effect pumps IOUs disguised as real money into the economy, and is considered a cause of the global banking crisis. GUARDIAN