Thursday 7 August 2014

Thursday, August 07, 2014 Posted by Hari No comments Labels:
Posted by Hari on Thursday, August 07, 2014 with No comments | Labels:

Publicly-owned East Coast Mainline successfully pays taxpayers “dividend” of £1bn, sparking fresh reprivatisation fury
The east coast mainline paid a record £235m back to the government in its final full year as a state-owned company, a 12% increase on the previous year. That means the franchise, run by Directly Operated Railways (DOR), has returned more than £1bn to the public purse over the past five years, sparking renewed calls for it to remain in public ownership. The RMT transport union said the figures made "a mockery of the government's plans to bulldoze through a reprivatisation before the next election, ignoring the financial and operational success of DOR and the catastrophic impact of two previous private sector failures on the line". The London to Scotland rail franchise has been under the control of the Department for Transport since the previous private sector operator, National Express, pulled out in 2009. In 2007, another private company GNER also ceased its east coast operation after its parent company Sea Containers ran into financial difficulties. The Department for Transport said the decision to return the line to private sector ownership was final. GUARDIAN

Tax inversions: US Treasury explores moves to block major corporate tax dodge
The US Treasury Department is exploring ways to unilaterally block a surge of U.S. companies shifting their headquarters overseas in search of major tax savings. The new escalation of the White House battle against corporate tax inversions came as a key congressional Democrat circulated a draft of potential legislation that could make it more difficult for U.S. companies to re-incorporate overseas. The Treasury action takes aim at a trend that has seen 47 U.S.companies move their tax-reporting address abroad during the last decade, according to Congressional Research Service data. Roughly 12 more are pursuing or researching potential shifts, including Illinois-based pharmaceutical giant Medtronic. President Obama has criticized the exodus, contending the departing firms are "gaming the system" while eroding federal tax collections and forcing other American taxpayers to make up the shortfall. House Democrats in May introduced anti-tax inversion legislation similar to the proposal in Obama's fiscal-year 2015 budget. However, Republican leaders contend that the best way to keep U.S. firms from leaving is an overhaul of the U.S. tax code that includes a reduction of the 35% top tax rate on businesses. USA TODAY

Government admits staff cuts contribute to compensation claims delays for military veterans
The Ministry of Defence said delays were down to a rising number of cases and because there were fewer staff dealing with the claims. One veterans' group said waiting times for claimants had increased from 82 days in 2010 to 219 days in 2014. The government said the 12,000 redundancies made in the armed forces since 2011, as well as the "rising claiming culture", had led to more people putting forward cases. Veterans dismissed this, saying the claims reflected a genuine need. The government also said the Boyce review that evaluated the process for military compensation in 2010, was partly responsible as it had diverted resources. But Lord Boyce said it was difficult to envisage how a review carried out several years ago had resulted in the current delays. Madeleine Moon, an MP who sits on the defence select committee, said it was "offensive" for the government to talk about a "claiming culture" being responsible for the backlog. She said: "If people are injured, if people's lives are changed that dramatically that they need financial compensation to be able to deal with the day-to-day grind of living with an injury, they should have the financial help that we as a nation have covenanted to provide." BBC NEWS

Credit and loan agreement errors likely to trigger payouts approaching £1bn
An epidemic of errors in credit and loan agreements is the latest expensive scandal to hit the banking sector, with the cost already approaching £1bn. It affects some personal loans, credit and store cards, and hire purchase agreements. It has nothing to do with the payment protection insurance (PPI) scandal. Many of Britain's banks and building societies have discovered that some of the annual statements, arrears notices and other correspondence sent to customers did not comply with the Consumer Credit Act because they did not give all the information that people were entitled to by law. Under the law, borrowers are not liable for interest or default charges relating to a period when a lender has not provided the information, even if the original documentation was fully above board. One common error is that loan statements failed to include the original amount borrowed. The law requires such statements to contain the sum borrowed, plus the opening and closing balance. The problem first came to light in December 2012 when it emerged that 152,000 people who have, or had, a personal loan from Northern Rock would each receive a windfall averaging £1,775 because of a paperwork glitch. The taxpayer picked up the £270m bill because the error happened when Northern Rock was in public ownership. GUARDIAN

Rig energy prices and you'll be jailed, says energy secretary
People found guilty of rigging wholesale gas and electricity prices could face up to two years in jail. The proposed new powers for UK energy regulators to safeguard consumers and provide a deterrent against abuses will be put forward by Ed Davey, the Energy and Climate Change Secretary. Under the current regulations, UK energy regulators can investigate and fine people found breaching the rules. The new laws would make it a criminal offence to fix the price of energy at an artificial level or use insider information to buy or sell energy on the wholesale market, the Department of Energy (Decc) said. It would also be an offence to make misleading claims or conceal facts about wholesale energy prices to manipulate the market – especially if it could affect competition in the energy market. Wholesale energy prices - the price that energy suppliers pay to buy the gas and electricity that they then sell to consumers - directly affects energy bills. The Department for Energy and Climate Change said the Government was "breaking up the stranglehold" of the Big Six eletricity and gas supplier, "encouraging more competition and ensuring energy companies provide simpler tariffs". Last week the Competition and Markets Authority launched an investigation into competition and transparency in the retail energy market. The proposed new criminal sanctions could come into force in spring 2015. TELEGRAPH

HSBC chairman warns against banking reforms
The chairman of HSBC, Douglas Flint, warned that fear of hefty fines was forcing banks to become risk averse as they grapple with unprecedented regulatory reforms in the wake of the financial crisis. Flint said there was an "observable and growing danger of disproportionate risk aversion". He made his remarks as the bank, which makes two-thirds of its profits in Asia, reported a 12% fall in first-half profits to $12.3bn and published 10 pages of warnings about the litigation and regulatory fines it could face on an array of matters ranging from the collapse of the Madoff empire to the fixing of prices in currencies and gold and silver. Some of these fines could be "significant", the bank added. Flint outlined a list of regulatory changes that the bank was facing, including implementing a ringfence between its retail banking and "casino" investment arms – demanded by UK regulators from 2019. Andrew Tyrie, the Conservative chair of the Treasury select committee, who chaired the parliamentary commission on banking standards that called for the "electrification" of the ringfence, to break banks up if they failed to comply with the rules, said: "We must ensure the momentum behind the crucial reforms both on ringfencing and on electrification is not lost. They are in any case half a decade away from completion.” GUARDIAN


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