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Thursday, 24 July 2014

Thursday, July 24, 2014 Posted by Jake No comments Labels:
Posted by Jake on Thursday, July 24, 2014 with No comments | Labels:

U-turn: RBS bosses 'wilfully obtuse' over alleged mistreatment of small firms
Senior directors at RBS have been strongly criticised for giving misleading evidence to MPs investigating claims that the bank mistreated small firms. An earlier report by Lawrence Tomlinson, a Government adviser, alleged that the bank’s Global Restructuring Group (GRG) division was forcing small businesses into administration so that the bank could take their properties and sell them for a profit. Another report by Sir Andrew Large concluded that there were potential conflicts of interest between GRG and its small business clients because the division was an “internal profit centre”. The former Deputy Governor of the Bank of England argued that GRG could be tempted to drive profits from clients rather than help them and turn them around, as the division was designed to do. In reply, giving evidence to MPs, RBS bosses had repeatedly insisted that GRG was not a “profit centre”. However, in a new letter to Andrew Tyrie, chairman of the Treasury Select Committee, deputy chief executive Chris Sullivan, who is leaving RBS next year, said he had to “correct the statement he made to the Committee” since he now agreed that GRG was indeed a profit centre. Mr Tyrie concluded: “If this is how RBS deals with a parliamentary Committee, how much can customers and regulators rely on it to be straightforward with them?” TELEGRAPH

Parliament says disabled benefit delays a 'fiasco'
The Public Accounts Committee said the new Personal Independence Payment scheme had been "rushed" through, with a "shocking" impact on claimants. "Many" faced six-month delays, with terminally ill people waiting a month on average for the payment, it said. New claims for the Personal Independence Payment (PIP) - which replaces the Disability Living Allowance (DLA) - began in April 2013. They are worth between £21 and £134 a week. The Department for Work and Pensions began processing new claims for PIP in northern England, but had only made 360 decisions when the scheme was introduced nationwide in June. Reassessment of the existing 1.7 million DLA claimants began in October, but was effectively paused after a backlog of some 780,000 claims built up. Committee chairwoman and Labour MP Margaret Hodge said: "The department's failure to pilot the scheme meant that the most basic assumptions, such as how long assessments would take and how many would require face-to-face consultations, had not been fully tested and proved to be wrong." Ministers defended the system and said the committee’s figures were out of date. BBC NEWS

George Osborne's deficit reduction plan under pressure as borrowing rises
George Osborne is on course to miss his goal of trimming Britain’s deficit this fiscal year after figures showed public borrowing climbed 7.3pc in the first quarter. The Government borrowed £11.4bn in June, just £100m less than the same month last year, and well above analysts’ forecasts of a deficit of £10.7bn. Last month’s borrowing increased the 2014/15 deficit to £36.1bn, up from £33.7bn at the same point a year ago. It also brought total public sector net debt to a record £1.305 trillion in June, equivalent to 77.3pc of GDP (the figures exclude the effects of financial interventions and other one-off factors). The news underlines the magnitude of the task facing Mr Osborne. The Chancellor is aiming to cut the deficit to 5.5pc of GDP in the 2014/15 fiscal year, from 6.5pc last year, to meet targets set by the Government’s forecaster, the Office for Budget Responsibility (OBR). When the coalition came to power in 2010 Mr Osborne promised to eliminate the annual deficit - which at that point stood at 11pc of GDP - by the 2015 election. This goal has since been pushed back by two years to 2016/17, but even the revised target has been thrown into doubt. TELEGRAPH

Banks face new criminal investigation over foreign exchange market manipulation
The Serious Fraud Office has launched a criminal investigation into whether a number of traders at top banks colluded to artificially fix rates in the £3 trillion-a-day foreign exchange markets. Regulators around the world, including the UK, US, Switzerland and Hong Kong, are already looking into alleged rigging of foreign exchange rates but the SFO’s intervention will mark the first official criminal investigation. London is where around 40pc of foreign exchange trading takes place and traders are alleged to have colluded via online chatrooms with names such as the “Bandits’ Club” and the “Dream Team”. The Bank of England has also been dragged into the affair - it has asked Lord Grabiner QC to look into whether any of its own officials were implicated in forex manipulation between 2005 and 2013. So far more than 25 traders working at a number of the world’s biggest banks have been fired or suspended while regulators around the world continue their investigations. TELEGRAPH

RBS chief says foreign exchange manipulation fines could costs banks more than Libor scandal
RBS paid $612m (£390m) last year to settle allegations that it manipulated Libor rates, one of several banks hit with big fines for rigging financial benchmarks. Regulators are now investigating allegations that traders manipulated key reference rates in the $5 trillion-a-day foreign exchange market. Asked if the foreign exchange (forex, or FX) investigation could be a bigger problem for the industry than Libor, RBS Chief Executive Ross McEwan said: "Unfortunately, it has the hallmarks". U.S. and European regulators have handed down about $6 billion in fines to 10 banks and brokerages, including UBS, Barclays and Deutsche Bank for alleged rigging of Libor and its euro cousin Euribor, and more banks are expected to be hit. But a number of industry analysts have said the combination of fines from investigations into forex manipulation in more than half a dozen jurisdictions worldwide, and the potential for suits by fund managers and other investors, could saddle banks with a bill several times costlier than Libor. REUTERS

Workers to lose out on thousands as bonus payout for delaying state pension is slashed in HALF from 2016
The two-tier system of the basic state pension and the second state pension (S2P) will be replaced by the flat-rate pension from April 6, 2016. But pensions minister Steve Webb confirmed today that when the new state pension is introduced in April 2016, people will only see their pension rise by 5.8 per cent if they defer payments for a year. Currently the increase is 10.4 per cent. It will mean someone getting the new state pension, of an estimated £155-a-week, or £8,060-a-year, would only see their annual payments increase by £467.48 if they defer for a whole year. Under the current system, that increase would be £838.24. The move is expected to save the Government £200million-a-year by 2020, and £300million-a-year by 2030. Pensions expert Tom McPhail, of Hargreaves Lansdown, said: 'After yesterday’s strong PR on the new pension freedoms, today the Government is using the last day of term to shovel out the less popular outstanding announcements before heading off on holiday.’ DAILY MAIL

Motorists ripped off by up to 3.5p at the pumps as they fail to benefit in full from oil price drop
AA president Edmund King said that if retailers and oil giants fail to clean up their act they face the risk of action by the European Commission, which is pushing for greater openness in the pricing of fuel and even regulation to make it happen. He said: ‘The European Commission has indicated that it will promote fuel price regulation, having been wowed by Austria’s up to 3.6 per cent cut in petrol prices and up to 2.5 per cent reduction in diesel prices since introducing regulation in 2011.’ The European Commission’s study on the vehicle fuels market published this month highlighted a £10billion per year loss to European consumers because of the way they are treated by the road fuel industry. In the UK, diesel prices alone are up to 3.5p higher than they should be, says the AA. And millions of drivers are victims of a ‘postcode lottery’ with big discrepancies between areas where there are no Asda supermarkets putting pressure on forecourts to keep prices down. DAILY MAIL

Parliament says Student Loan system is almost financially unworkable
In a scathing report, the Commons Business Committee called for an urgent review of the system, amid predictions the government is heading towards a multibillion-pound black hole in the funding of universities. There are growing fears among academics about the student loan system, despite unpopular changes in 2011 that involved tripling tuition fees for students. In its inquiry, the committee found that plans to lift a cap on student numbers, funded by selling the student loan book, may make the funding gap worse. The government's own analysis of the sell-off of the student loan book has found it would raise only £2bn rather than the £12bn originally expected. Vince Cable, the business secretary, has now stalled on the sell-off. Adrian Bailey, chairman of the Commons committee, highlighted a persistent record of inaccurate debt forecasting and a failure to collect student loans effectively that "threatens the continued existence of the current student loans model". Under the current student loan system for students in England, the government loses about 45p on every £1 it loans out – much higher than the 28% originally predicted. GUARDIAN

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