Rip-off News round-up. Our pick of the last week's media (Thu 14th Aug)

London gets 24 times as much spent on infrastructure per resident than north-east England

Figures derived from a research report by IPPR, show Londoners receive £5,203 more per head on capital investment than people in the north-east – a discrepancy sure to reignite a long-running row on whether London’s growth is coming at the detriment of the rest of the UK. One third of planned infrastructure spending in London is the £14.5bn earmarked for Crossrail with line upgrades on the Tube receiving the second most at £8.2bn. The biggest rail project currently set to specifically address the needs of those in the north of England is the delivery of a range of products including improvements to the journey time on the Manchester Airport through the Ordsall Chord, which will cost £498.1m (3.4% of the cost of Crossrail). The UK chancellor George Osborne has endorsed a £15bn plan to improve infrastructure in five northern cities. Although he did not commit to any funding, Osborne said the overall aim was: “To end the imbalance in the UK economy so our success is not wholly dependent on the global city of London, so we have across the north of England individual cities that are better connected, have a better quality of life, and are able to create.” GUARDIAN

Office cleaners face underpayment, non-payment, mistreatment and abuse, says Equality and Human Rights Commission

Commercial cleaning staff, usually women and migrant workers, complained of being frequently mistreated by employers, who often ignore obligations to provide holiday and sick pay, according to the new study by the Equality and Human Rights Commission (EHRC). The report also cites disturbing examples of abuse of cleaning staff by agency bosses, and notes that often cleaners feel unable to report problems for fear of losing their jobs. It cites examples of workers who were sacked for complaining about not being paid in full and on time. The study, which focuses on the non-domestic sector, looked at cleaners working in offices and in the health, retail, transport and leisure sectors. The wholesale outsourcing of office cleaning to agencies from the 1970s (when most organisations had in-house cleaners) has led to downward pressure on wages and working conditions. "Contracts often place cleaning firms under enormous pressure to deliver a high-quality service at the lowest cost possible. This often has a negative impact on employment practices, affecting pay, the intensity of work, job security, training and working hours," the report finds. The cleaning sector contributes more than £8bn to the British economy, and consists of around half a million workers. Cleaners interviewed reported pay rates for private sector contracts ranging between £5 and £7.50 an hour, indicating that some are paid below the national minimum wage of £6.31. While the study conceded that those who were underpaid were the minority, researchers found "a significant number of workers are not paid in full, or do not receive the holiday or sick pay they are entitled to". GUARDIAN

Osborne’s “cashing in” shakeup may lose pensioners £3.6bn in taxes, and cause new wave of mis-selling

In the last budget, Osborne said he would "remove all remaining tax restrictions" and give pensioners "complete freedom to draw down as much or as little of their pension pot as they want, anytime they want". But the tax implications of cashing in pension pots have only emerged in detail since the budget. Figures compiled by Hargreaves Lansdown indicate that someone with a £100,000 pension pot will pay £34,500 in tax if they take the money as cash on retirement. The Treasury is estimating that around 130,000 pensioners at retirement will take advantage of the new flexibility, with the pensions minister, Steve Webb, claiming that savers will be free to blow the lot on a Lamborghini, if they wish. Detailed figures released after the budget reveal that this “tax trap” for many pensioners will boost the Treasury coffers by £3.6bn between 2014 and 2020. Critics are now predicting a wave of mis-selling from April 2015, as pensioners are encouraged to cash in their pension pots to invest in buy-to-let property, unaware of the huge one-off tax charge they face. GUARDIAN

RBS bosses pocket disputed windfall: Bank hands out £3.5m in new fixed ‘allowances’ to top directors in a bid to beat bonus cap

Like its rivals, RBS has introduced fixed annual allowances – paid in two instalments – to swerve a cap on bonuses introduced by the European Commission at the start of the year. This bumps up basic pay packages, which are not subject to the restrictions. The EU-wide cap prevents banks from paying more than one year’s salary, rising to twice salary if shareholders approve. RBS was blocked by the Treasury from applying the higher limit. Deborah Hargreaves, chair of the High Pay Centre, said: ‘This goes against spirit of the rules, if not the letter... When RBS’s major shareholder – the Government – has voted against them paying twice their salary as a bonus it doesn’t seem right that they should be paying fixed allowances to get around that.’ Ten senior executives shared the windfall but the biggest winner was Rory Cullinan, the boss of the ‘bad bank’ set up at the start of the year to manage some £38billion of the most toxic assets. He was awarded £534,000 in shares for the first eight months of the year. Some £251,046 worth of shares were sold immediately to pay his taxes. The remaining award will be released over the next five years. Chief administrative officer Simon McNamara, head of conduct and regulatory affairs Jon Pain and chief risk officer David Stephen all received £400,000 before tax. Chief executive Ross McEwan has already waived his allowance. RBS made an £8.2billion loss last year. DAILY MAIL

Ofgem ‘to blame’ for high energy prices

In a submission to the Competition and Markets Authority (CMA), five former energy regulators including Stephen Littlechild and Sir Callum McCarthy suggest that Ofgem may have weakened competition through poorly designed regulation imposed since 2008. They suggested new Ofgem rules that prevent energy firms from offering existing customers worse deals than new customers, and cut the huge number of separate tariffs down to four per firm, had decreased competition and therefore prices. Mr Littlechild, who was head of electricity regulator Offer from 1989 to 1998, told The Sunday Telegraph he believed Ofgem had inadvertently weakened competition, citing the regulator’s own evidence that profits of the Big Six suppliers had risen from £233m in 2009 to £1.1bn in 2012. The CMA has launched an 18-month probe into the energy market at the request of Ofgem, after the energy regulator concluded that millions of households were paying too much for their gas and electricity because of a lack of competition across the sector. The former regulators are particularly concerned that Ofgem staff may be seconded to the CMA as part of the investigation and that four out of five principal sources cited in its statement of issues, defining the scope of the investigation, are all Ofgem publications. They said it was “important that the CMA’s report should be, and should be seen to be, independent of Ofgem” adding: “There are already some difficulties here.” TELEGRAPH

Bank of England cuts wage forecast

The Bank of England has halved its forecast for average wage growth, saying it now expects average salaries to rise by only 1.25% this year. The forecast comes as official figures showed average wages excluding bonuses grew by 0.6%. That is the slowest pace of growth since records began in 2001. However, the Bank upgraded its growth forecast for this year to 3.5% from 3.4%, and for 2015 it forecast growth of 3%, up from 2.9%. Bank governor Mark Carney said: "The economy is returning to a semblance of normality, but whether normality in terms of real wages returns will depend on improvements in productivity." The Bank's quarterly inflation report said: "Domestically, output is sensitive to the assumption that a gradual revival in productivity and real household incomes help to underpin a sustained expansion... Productivity growth has shown few signs yet of a recovery and is now projected to pick up more slowly than anticipated in May." BBC NEWS

UK evolving into self-employment capital of western Europe

Britain is becoming the self-employment capital of western Europe, according to a report by the IPPR that underlines how much the financial crisis has reshaped the country’s labour market. An average 7,700 people in the UK became self-employed each week over the past year. If these trends continue, the UK will soon look more like southern and eastern European countries, which tend to have much higher rates of self-employment, the think-tank IPPR said. UK self-employment grew 8 per cent in the past year, more quickly than in almost any other European country, the think-tank said. About 14 per cent of the UK workforce is now self-employed, compared with 10 per cent in Germany, 11 per cent in France and 13 per cent in Belgium and Switzerland. About 17 per cent of the Spanish and Portuguese workforces are self-employed, while the proportions in Italy and Greece are 23 and 32 per cent respectively. Self-employment in the UK has accounted for about a third of the rise in total employment since 2010. But economists disagree about why this shift has happened and whether or not it will persist after the economy fully recovers. Some argue that many of the newly self-employed are in fact barely working at all, which would suggest there is more slack, or untapped potential, in the economy than the 6.5 per cent unemployment rate would suggest. Meanwhile, unions say some employers have reclassified employees as self-employed for tax purposes, or to save the companies from paying pension contributions and other benefits. But a recent analysis by the Office for National Statistics found there had been no increase since 2012 in the number of people who had been self-employed for less than six months. The ONS concluded much of the rise could be explained by older self-employed workers choosing to delay retirement. FINANCIAL TIMES