Rip-off News round-up. Our pick of the last week's media (Thu 30th October)

Does Osborne realise? Probably! Ipsos Mori poll shows 1 in 8 will cash in pension pot under reforms 
More than 200,000 people will cash their entire pension pot when the government reforms take effect next year, with one in five planning to use their savings to fund a holiday, a study has found. From April, workers over 55 will be able to use their pensions like bank accounts and withdraw thousands of pounds to save, invest or spend as they wish. The change builds on the pension reforms Mr Osborne announced in his Budget, under which he scrapped rules that force most Britons to use their pension savings to buy an annuity. At the time, ministers emphasised that pensioners would be able to draw down the entirety of their pension pots to save, invest in property or even buy a Lamborghini. But Tom McPhail, head of pension research at Ipsos Mori, said that the poll showed people were underestimating the amount of tax they would have to pay despite the reforms, as only 25 per cent of each lump is tax free and the rest is taxed at a marginal rate. The withdrawals could land the taxman with a £1.6billion windfall. The poll found that those wanting to cash in their savings were most likely spend the money on holidays, with one in five saying that is how they would use the cash. Another 12 per cent said they would use it for DIY projects, 14 per cent to help their children and eight said they would spend some on new cars. One in four said they would save a portion of the money, whilst 13 per cent would use some of it to pay off existing debts. Investment in property would be the main reason to cash in their savings for 16 per cent, the survey found. Critics have questioned whether people could end up struggling financially if they spend all their money after retiring. TELEGRAPH

“Outrageous conduct”: City facing more than ‘a few bad apples’, says Bank of England deputy governor

Minouche Shafik, the deputy governor for markets and banking, said the industry urgently needed to come forward with its own proposals to reform a system recently tarnished by allegations of the rigging of foreign exchange trading. She warned that bad practices in markets may be re-emerging as memories of prior scandals fade. She said much had been done to strengthen the financial system, but some of the benefits were “offset by a long tail of outrageous conduct cases. These are like salt rubbed into the wounds to public confidence in financial markets.” Ms Shafik is overseeing the UK Fair and Effective Markets Review, launched by chancellor George Osborne over the summer after allegations that traders had rigged interest-rate and currency benchmarks. The scandals have damaged Britain’s reputation as a key global financial capital. A consultation paper by the Bank, Treasury and Financial Conduct Authority, launched on Monday, raises the prospect of tougher penalties on staff who breach internal guidelines, more intrusive electronic surveillance of trading floors and more established procedures for protecting whistleblowers. But it also considers harsher regulation including imposing higher capital charges on firms that fall foul of rules. It also floats the idea of extending the UK’s bonus clawback rules from banks to non-banks such as asset managers and trading firms. The review said regulators should have the power to police seven key financial benchmarks, including those governing oil, precious metals and foreign exchange. In the paper, the review asked whether there was a need to strengthen criminal sanctions in fixed interest, currency and commodity (FICC) markets, as well as to introduce punishments such as temporarily suspending firms’ or individuals’ permissions to trade in certain markets. FINANCIAL TIMES

Sports Direct forced to spell out zero-hours workers' rights in their job adverts

Zahera Gabriel-Abraham launched the case after taking a zero-hours contract with Sports Direct which she says did not make clear that she might not be offered work with the business. She also claimed that she was told she would not receive holiday pay. She resigned saying her health was suffering because the threat of not being given any work some weeks was making her ill. Mike Ashley’s Sports Direct high street chain has now reached a settlement with Ms Gabriel-Abraham. About 20,000 of Sports Direct’s 23,000 staff are employed on zero-hours contracts and reaching a settlement with such a large business means it will resonate around the industry. Unusually for a settlement, the claimant did not agree to be gagged from speaking out about it as a condition of striking a deal. “Zahera wanted to make a difference and in order to do that she would not agree that it would be secret,” said Elizabeth George, a barrister at Leigh Day which represented Ms Gabriel-Abraham. “This is a significant step in the right direction. It will be interesting if other companies are more upfront about the contracts as a result.” Ms George added: “The new adverts have to state three things: hours are not guaranteed, they may vary and there may be weeks when no work is offered. “They are not going to be the most attractive job adverts: ‘Come work for us and there’s no guarantee you will get any work.’” TELEGRAPH

Asda faces mass legal action over equal pay for women

Asda, the UK's second largest retailer, is facing a mass legal action by women who work in their stores. The women claim they are not paid the same as male workers in the distribution warehouses - despite their jobs being of "equivalent value". One Asda store worker said that the work was the same whether you were in the shop or in the warehouse - packing and unpacking pallets of clothes and food and putting stock on shelves, often through the night. The legal firm managing the case, Leigh Day, says it has already received 19,000 enquiries from current or former Asda staff in relation to the group legal action. The case will test how retailers decide what they pay their staff in different parts of their business. And if the women are successful it could have serious ramifications for the whole sector. Lauren Loughheed, the solicitor with Leigh Day who is leading the case, said that the pay difference between shop and warehouse workers could be as much as £4 an hour. That's a big difference when you are earning £7 an hour. And, if the cases are successful, women workers could be compensated for six years of back pay. The legal action, believed to be the largest of its kind in the private sector, could lead to some very high payouts. In the public sector, the issue has led to major battles between councils and their workers. Women who worked as cleaners and school catering staff have taken hundreds of class actions to close pay differentials with men who had jobs such as refuse collector or street cleaner. One council, Birmingham, has agreed to pay over £1bn to settle the claims of tens of thousands of women which go back over many years. Ms Lougheed said that the private sector had been slower to act and that this test case could prove a watershed. Asda has signalled it will fight the claims vigorously and says it does not discriminate. BBC NEWS

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Londoners get around ten times more of taxpayers’ money spent per head on capital investment than the rest of England

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The most fearsome beast in the political jungle is you, the voter. Now is the time to wake up and roar!

A long game is being played on the British public by the political classes. It is a game aimed at reducing our personal expectations from life in Britain. It started with the Tories in 1979, and continued through Labour and Coalition governments since then. 

The game was played quite subtly until the banker induced crash in 2008, but since then all the delicacy has been dropped. Not because the banker crash created a crisis, but because it created a cover.


In recent years we have seen wage freezes, benefits cuts, and the erosion of our pensions. Our access to legal aid has been sliced. Employment protections and the right to strike are being attacked. Services from libraries and public parks to police officers and defence are being scrapped. We now get unqualified teachers in “free schools”; unqualified translators and under-qualified barristers in the legal aid system; paramedics doing what doctors used to do; reservists doing what the professional army used to do. 

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Rip-off News round-up. Our pick of the last week's media (Thu 23rd October)

Chair of the US Federal Reserve Janet Yellen says income inequality is un-American

Yellen suggested that such a trend, unaddressed, was contrary to the founding principles of the United States. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity,” she said. She also cited the “Great Gatsby curve,” – “the finding that, among advanced economies, greater income inequality is associated with diminished intergenerational mobility”. Yellen’s comments dovetail with concerns about inequality among other global central bankers. Yves Mersch, the governor of the central bank of Luxembourg, took a stand this morning against massive stimulus measures from the Federal Reserve and the European Central Bank, on the reasoning that they widen the gap between the rich and poor. Separately, Treasury Secretary Jack Lew recently encouraged the World Bank to address inequality in developing economies. The strong tone of Yellen’s speech adds to the increasing discussion around economic inequality that was first popularized by the Occupy movement and then crystallized in the blockbuster success of Thomas Piketty’s Capital in the 21st Century, which posited in part that invested and inherited wealth will always accumulate faster than general economic growth. Yellen cited Piketty’s book and his other work with his frequent research partner, Emmanuel Saez. GUARDIAN

Institute of Directors backs TUC claim for higher wages

Christian May, head of campaigns at the IoD, said: “We have sympathy with the TUC’s argument because it remains the case that too many people are still feeling the effects of the recession more keenly than the benefits of the recovery.” “When the TUC protests about the pay gap between bosses and workers, remember they are not talking about business in general, but about a tiny number of people who run the world’s biggest firms. The boards of these companies can no longer be deaf to public opinion,” said May. He said pay rises were “on the cards” for employees of small- and medium-sized businesses. The IoD said that the majority of the lobby group’s members earned £100,000 a year. While this was a “significant amount” it was “nothing like the astronomical sums paid to some of the very top bosses”, said May. The average annual pay of a FTSE 100 chief executive, according to a recent study by Incomes Data Services, is now £3m. GUARDIAN

Pay protests bring tens of thousands onto UK city streets

Leaders of some of the UK's biggest trade unions criticised the government, saying pay had fallen despite the economic upturn. The TUC says average wages have fallen by £50 a week in real terms since 2008. Dave Prentis, general secretary of the Unison union, said "Our members didn't cause this recession, our members didn't cause the failures of the banks." Len McCluskey, general secretary of the Unite union, said Labour should support workers by offering a "clear socialist alternative" to the Conservatives at the next election. "I say to Labour - stop being scared of your own shadow. Don't shrink what you offer the British people," he said. Public sector workers including teachers, nurses, civil servants and hospital workers were among those taking part in the protests, alongside rail and postal workers and others from private firms. The marches come after industrial action by health workers on Monday - the first strike over pay in the NHS since the 1980s and the first time midwives had ever taken action. The government says pay restraint has safeguarded jobs and services. BBC NEWS

We'll sue if you flout crackdown on bankers’ bonuses, EU tells Bank of England

The European Banking Authority’s most senior executive, Adam Farkas, raised the prospect of court action after the Deputy Governor of the Bank of England described the European Union’s bonus cap as ‘the wrong policy’. All of Britain’s leading banks have attempted to sidestep the European rules by offering senior staff extra payments, called either allowances or ‘role-based’ payments. Now the decision of the EBA on Wednesday has effectively ruled that these are bonuses under another name. The European Union passed a directive earlier this year requiring banks to cap bonuses at 100 per cent of a banker’s salary or 200 per cent if they can get prior approval from shareholders. Chancellor George Osborne opposed the directive from the start and is challenging the law in the European Courts. All the major UK banks are now paying their staff allowances. HSBC boss Stuart Gulliver gets £1.7 million a year in shares quarterly, on top of his pay and annual bonus. Barclays calls its allowances ‘role-based pay’ and is handing £950,000 in this form to boss Antony Jenkins this year. Barclays executives get this quarterly in shares. More junior staff receive cash sums monthly. Lloyds boss Antonio Horta-Osorio was awarded a fixed allowance of £900,000 for 2014, which he will receive in share awards over the next five years. RBS’s chief executive Ross McEwan is the only major bank boss to not receive an allowance this year – but his bank will still pay other executives and dozens of other senior bankers in the new format. The British Bankers’ Association estimates that 35,000 of Europe’s bankers will be affected by the bonus cap, two-thirds of them in the UK. DAILY MAIL

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Graphs at a glance: Why is it that unemployment is falling, but wages and income tax revenues aren't growing?

In October 2014 the BBC reported that FTSE100 company directors earned 120 times the average wage. An earnings figure that has shot up sixfold from just 20 times the average wage in the year 2000. 

The BBC also reported that inspite of bumper top wage growth and generally falling unemployment, income tax revenues were going to fall below expectations. Why is this?

The following may provide some explanation:

1) The Bank of England's May 2014 Inflation Report shows that the number of "full time employees" (the dark green lines in the graph below) had not recovered since the 2008 banker induced crash. The 'jobs recovery' is made up mainly of part-time and self-employed jobs.

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Rip-off News round-up. Our pick of the last week's media (Thu 16th October)

MPs seek inquiry into £1m bonus of disability firm boss

MPs have called for an inquiry into why a charitable scheme providing cars for the disabled paid its chief executive more than £1million in bonuses and benefits last year. Mike Betts, head of not-for-profit company Motability Operations, took home bonuses totalling £911,915 in the year to September 2013, as well as a £125,000 payment in lieu of pension. This was on top of his basic salary of £501,900. Contracted by the Motability charity, the company provides 630,000 vehicles for disabled people, including those injured while serving in Iraq and Afghanistan, with customers using their disability benefit payments to pay for the scheme. John Mann, the Labour MP for Bassetlaw, who has examined the scheme’s finances, branded the situation as “scandalous”. He said there was no reason for Mr Betts, 52, to receive such bonuses because the company had no captive market and no competition. The revelation comes as the government implements reforms meaning tens of thousands of disabled people will lose their entitlement to Motability vehicles. Under new, stricter criteria for eligibility, anybody who can walk more than 20 metres, even if this is with the aid of a prosthetic, crutches or walking stalk, will no longer be entitled to a vehicle. TELEGRAPH

British oil giant BG in pay row as new boss Helge Lund lands 'excessive' £29m

After a run of disappointing candidates, the company insisted it had to pay top whack to get a man suitable to lead the company. It has poached Helge Lund from Norwegian rival Statoil with a package that has been criticised as ‘excessive’. He will be paid £1.5million a year, as well as bonuses worth up to £3million and another share incentive scheme that could pay out up to £9million if he hits performance targets. Additionally, he could get another £12million in shares over the next five years if the pay committee decides he is doing a good job. This particular measure is so controversial that the company shareholders are being asked to vote for it at a special meeting. BG will also generously compensate Lund for the potential share awards he is leaving behind at Statoil to the tune of £3million. He is also being given £480,000 to move his family to Britain, and will have £450,000 a year put into his pension pot. Andrew Gould, BG’s executive chairman, defended the pay deal, saying: ‘The company needs a proven leader from the oil and gas industry to deliver the exceptional opportunities available to it.’ BG shares fell 10p to 1015p. DAILY MAIL

Ireland to close notorious ‘double Irish’ tax loophole

Apple and other multinationals based in Ireland are to be given a four-year window before the phasing out of a scheme that cuts their tax bills. Amid mounting international criticism of the arrangements, which save foreign companies billions of euros, Ireland’s finance minister, Michael Noonan, is expected to announce the end of the “double Irish” scheme when he delivers his budget on Tuesday. The European commission is investigating “sweetheart” tax deals between the Irish state and Apple, and last month Brussels provisionally found that the iPhone maker’s tax arrangements in Ireland were so generous as to amount to state aid. Noonan’s move may pre-empt measures hinted at by the UK chancellor last month, when he announced a crackdown on technology firms’ tax strategies at the Conservative party conference. George Osborne said: “Some of the biggest technology companies in the world … go to extraordinary lengths to pay little or no tax here … We will put a stop to it.” Party officials briefed that he had companies using the double Irish scheme in his sights. On the international stage, the G20 group of powerful economies has commissioned the Organisation for Economic Cooperation and Development to produce a package of tax reforms to rein in multinationals. This work is expected to be completed by summer 2015. GUARDIAN

About time? 2014 Nobel Prize for Economics awarded for “analysis of market power and regulation"

Jean Tirole has been named as 2014's winner of the Economics Nobel prize, for his work on the regulation of large companies. The French professor’s research has been central to the study of regulation in economics, since he began work in the area in the early 1980s. He has helped economists and policymakers to understand how best to regulate large firms, especially where regulators face “asymmetric information” - where they do not have access to the same knowledge as the firms they seek to regulate. Before Mr Tirole’s work, policymakers often favoured blunt tools, such as price caps, while Mr Tirole has advocated more sector specific and tailored approaches - smarter approaches to writing rules. Pierre Moscovici, France’s former finance minister, said that Mr Tirole’s work “informs the paths we need to follow to get out of the crisis”. TELEGRAPH

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Graphs at a glance: Is NHS spending really being protected? The data shows this is not true.

Our politicians have got into the habit of pulling off shabby tricks to deceive the voters. Even when we don’t know we are being tricked, we suspect we probably are. This is true of Labour, Conservative, Liberal Democrat, and the rest. 

For example, is David Cameron’s promise to protect the NHS budget all it seems to be? If you thought "protect" meant we would continue to receive the same level of care, you'd be wrong.

Cameron promised the NHS budget will be protected in “real terms”. Which means its government funding increases in line with inflation. He would like you to presume in 2015 the NHS would be able to do as much as it did in 2010.

The shabby trick here is the NHS is being given the same buying power, but it has to buy more. Even forgetting about new more expensive treatments, it has to buy more because:

• The population is growing. So for the same money the NHS has to treat more people.
• The population is aging. Older people need more health care.

1) According to the Office of National Statistics (ONS) the UK population will be about 64.8 million in 2015. That would be an increase of 2 million people in the five years since 2010. 

An extra 2 million people will have to be kept healthy in 2015 on no more money in real terms than was available in 2010.

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Two thirds of corporate profits since the 1980s have come from keeping wages down

KJ, Fee and Chris discover how...

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Rip-off News round-up. Our pick of the last week's media (Thu 9th October)

Dept of Energy & Climate Change fails taxpayer: £16.6bn of Renewable Energy contracts awarded without competition

The government's decision to award billions of pounds of renewable energy contracts without a proper tendering process has left consumers out of pocket, said MPs on the Public Accounts Committee. The five offshore wind and three biomass project contracts were awarded without competition to avoid delays. But  MPs said Decc's own case showed no benefits to awarding contracts early. They added that it was not clear if the early contracts were needed in order to meet 2020 renewable energy targets. The contracts involved a guaranteed "strike price" that the renewable energy producers would receive for the energy that they produced. This strike price was linked to inflation, with consumers picking up the bill if inflation rose when the projects were completed. The MPs criticised the government for failing to challenge developers' claims that the projects would not go ahead without consumers taking on part of the risk. "By awarding contracts worth up to £16.6bn to eight renewable electricity generation projects without price competition, Decc failed to adequately secure best value for customers," said committee chairwoman Margaret Hodge. "Yet again, the consumer has been left to pick up the bill for poorly conceived and managed contracts." BBC NEWS

Supermarkets charge suppliers £80,000 just to get new products on store shelves, fuelling a third of profits

Supermarkets are making as much as a third of their profits from suppliers by demanding the type of charges that have led to the accounting scandal at Tesco. Tesco has admitted that it has overestimated its half-year profit by up to £250million and the overstatement is said to relate directly to the miscalculation of the commercial charges imposed on suppliers. The scale of such ‘commercial income’ – as it is known in the industry – is not spelt out in the financial results of supermarkets and its crucial importance has only begun to emerge in the wake of the Tesco fiasco. The fees include penalty charges for late or incomplete shipments, bonuses for hitting sales targets, refunds for promotional discounts and one-off payments for a multitude of reasons such as launching new products. The fees are lumped in on top of simple retail profits and they can grow to huge sums when large supermarkets are able to negotiate more lucrative deals with their suppliers. It has also come to light that Tesco was rapped at the end of last year by supermarkets watchdog the Groceries Code Adjudicator for unfairly using its size to demand that suppliers pay extra fees to secure the best positions on its shelves. Adjudicator Christine Tacon warned Tesco last December that it should not have been asking for such payments. The ruling followed a formal complaint from trade body the British Brands Group about the charges. A spokeswoman for the Adjudicator said eight out of ten suppliers complained they had experienced issues that could be in breach of the supermarkets’ code of conduct. Supermarkets could face hefty fines – as well as a huge fall in total profits – if widespread abuse is uncovered. DAILY MAIL

Wonga writes off £220m in debts for 330,000 customers

Wonga was required to write off the debts because the industry regulator, the FCA, found that it had granted the loans without checking people could afford the repayments. The checks were found to be so poor that many borrowers had no chance of ever repaying the loan because of their dire financial circumstances, with many living on unemployment or disability benefits. The company, which charges annualised interest rates of up to 5,853% a year and has been accused by MPs of “legal loan sharking”, said it would entirely wipe out loans to 330,000 people, and scrap interest and charges owed by a further 45,000 customers. Some of the loans are understood to be more than a year old and have ballooned from a few hundred pounds to thousands. Wonga’s new chief executive, Andy Haste - who has been brought in to overhaul the tarnished brand – apologised and said Wonga lacked experienced credit professionals and “lent to people we should not have lent to”, adding: “The checks were not sophisticated enough and not strong enough.” Haste replaced Wonga’s founder Errol Damelin, who quit the firm in June. Damelin described Wonga’s interest rate as a “great deal.” The lender, he claimed, used sophisticated algorithms to ensure it did not lend to people who couldn’t afford to repay. Damelin, who founded Wonga in 2006, had hoped to collect a £100m windfall from floating Wonga on the stock market at a suggested £1bn valuation. Sources at the company said plans for a float have been scrapped. Wonga warned investors, already reeling from a 53% fall in profits announced on Tuesday, that the changes will lead to “a material drop in the number of loans to new and existing customers”. GUARDIAN

British homebuyers at back of queue for local flats marketed in Hong Kong

They are just the type of starter homes many first-time buyers are looking for. Priced from £180,000, Galliard Homes is building studio and one-bed apartments minutes from local shops and only a half-hour tube journey from central London. But if you are British, you may find yourself at the back of the queue: Galliard put the flats on sale to investors in Hong Kong one week before they go on sale in the UK – despite a written promise by the developer to give British buyers at least an equal chance. In December 2013 Galliard, along with other major developers such as Barratt and Taylor Wimpey, signed a pledge that they would give UK purchasers an equal chance to buy, amid widespread concern about the number of developments pre-sold to investors abroad. Four months later Galliard – the second biggest housebuilder in London – stood shoulder-to-shoulder with mayor Boris Johnson, with a separate undertaking. “We commit to market the homes in our developments first or first equal to Londoners. New homes on every development by the undersigned companies will be available for sale to Londoners before, or at the same time, as …to buyers from other countries.” Overseas buying of UK apartments has ignited considerable political controversy at a time when critics say Britain is building fewer than half the number of homes it needs for an expanding population. In prime parts of London, almost eight in 10 newly built apartments are sold to overseas buyers, led by the Chinese, with many subsequently left empty. But the developers argue that foreign buyers have invested £2bn in London alone, helping to fund 14,000 affordable homes, 16,000 jobs and £129m in stamp duty payments. GUARDIAN

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Graphs at a glance: Is the national debt being paid off? Cameron says yes but the independent Office of Budget Responsibility says it is actually increasing!

We at Ripped-Off Britons don't think much of politicians generally. But we try to give them the benefit of the doubt if we can.

When David Cameron, in his speech to the Tory Party Conference in October 2014, said we are "a country that is paying down its debts", was he fibbing or (giving benefit of the doubt) did he actually believe it?

The Tories had already made this statement in 2013, and were politely slapped down by Sir Andrew Dilnot pointing out that the national debt, far from being paid down, had continued to rise.

“The latest National Statistics on Public Sector Finances, published on the morning of 22 January 2013, show that public sector net debt (excluding the temporary effects of financial interventions) at the end of the second quarter of 2010 (June) was estimated to be £811.3 billion, representing 55.3 per cent of Gross Domestic Product, rising to £1,111.4 billion at the end of the fourth quarter of 2012 (December) (70.7 per cent of GDP).”

Sir Andrew Dilnot, February 2013

Cameron, making the same false claim at the 2014 Tory Party Conference, got virtually the same telling off from Sir Andrew with the figures updated to reflect the passage of time since the previous rebuke. Figures showing that the £1,111.4 billion debt of December 2012 had increased to £1,432.3 billion by August 2014.

“The latest National Statistics on Public Sector Finances, published by the Office for National Statistics on 30 September 2014, show that Public Sector Net Debt (excluding public sector banks) as at the end of June 2010 was estimated to be £997.4 billion (equivalent to 64.0 per cent of Gross Domestic Product) and £1,432.3 billion at the end of August 2014 (79.1 per cent of GDP), an estimated increase of £434.9 billion over the period. “

Sir Andrew Dilnot, October 2014

In this second letter, Sir Andrew helpfully provides a graph showing by how much the country's debts has increased each year since 2010:

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Graphs at a glance: When it comes to the election once again "It's the economy, stupid" that should decide it. Not the national economy, but the economies of individual families.

According to a report produced by the UK Parliament immediately after the Scottish Independence Referendum of September 2014, the strongest correlation with voting "Yes" to escape the grasp of the United Kingdom was unemployment. The higher the percentage of people claiming out-of-work benefits, the higher the "Yes" vote for independence.

As Bill Clinton realised, when he won the 1992 US Presidential Election, it's "the economy, stupid". Not the national economy, but the personal household economies of millions of families across the UK.

How will this play out in the coming General Election? Having endured five years of "all in it together" austerity, which has proved beyond doubt that we really aren't all in it together, which way next?

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Rip-off News round-up. Our pick of the last week's media (Thu 2nd Oct)

“Google Tax”: George Osborne tells tech giants 'We will make you pay your taxes'

In an ardent speech before the Conservative party conference, George Osborne said that some multinational technology firms go to "extraordinary lengths" not to pay tax in the UK. "You are welcome here in Britain with open arms," said the Chancellor to those firms. "While we offer some of the lowest business taxes in the world, we expect those taxes to be paid… If you abuse our tax system, you abuse the trust of the British people," he continued, vowing to stop such abuses. New legislation will prevent global technology firms from doing what is known as a 'double Irish' - in short, using artificial arrangements to divert profits to offshore tax havens that have been earned in the UK. Companies such as Google have faced grillings by politicians on the House of Commons Public Accounts Committee over why they appear to pay low rates of tax in the UK. Google was branded "devious" and accused of operating "smoke and mirrors" when it appeared before the PAC last year, charges which the company denied. TELEGRAPH

Apple may have to repay billions from Irish government tax deal

Apple’s international headquarters are based in Knocknaheeny, a run-down northern suburb of Cork. Two-thirds of Apple’s global profits for 2011 were attributed to companies registered in Cork. Apple says that it pays all taxes due. EU Commission experts say it paid just 3.7% tax on non-US profits of $31bn (£19bn) last year. The European commission has formally opened an investigation into the Irish deal.  The outgoing competition commissioner, Joaquín Almunia, said the commission’s preliminary investigation suggests that deals made between Apple and the Irish government in 1991 and 2007 “constitute state aid” and that “the commission has doubts about the compatibility of such state aid with the internal market [in the EU]”. He said that a deal which replaced them in 2007 also breaks the rules. Apple has also come under fire in the US for its complex tax arrangements, under which a company called Apple Sales International, which until 2012 had no employees and was controlled by a US-based board, is based in Ireland – where in 2011 it paid taxes of $10m on revenues of $22bn from non-US-based Apple activities, a rate equivalent to 0.045%. Senator Carl Levin, who published a damning report on Apple’s tax practices last year, issued a strong statement in support of the investigation. “The facts are abundantly clear: Apple developed its crown jewels – lucrative intellectual property – in the United States, used a tax loophole to shift the profits generated by that valuable property offshore to avoid paying US taxes, then boosted its profits through a sweetheart deal with the Irish government,” said Levin, who chairs the Senate Permanent Subcommittee on Investigations. Over 40 multinationals – including Amazon, Google and software security group McAfee – have operations in and around Cork, bringing 100,000 jobs to the area, according to Conor Healy, chief executive of the Cork chamber of commerce. GUARDIAN

Banks face paying out billions to more than 12million customers after landmark legal battle against Lloyds over 'unfair' £750 fine for customer who was just £2.67 overdrawn

Oliver Foster-Burnell from Taunton, Somerset, went a few pounds over his £500 limit with Lloyds while he was in between jobs in 2008. Within weeks, the 28-year-old received a letter saying for that every day since he had been charged £20 by the bank. The fees spiralled to £750 before Mr Foster-Burnell was able to find a way out of his financial mess. But, after settling his debts, he took his case to county court where a judge ordered the bank to pay back the fees with interest. His victory could pave the way for billions to be returned to customers in similar situations if Mr Foster-Burnell is able to convince a High Court Judge that his case could apply to others. If successful, banks could face returning as much as £30billion to 12.6million customers, according to a study by The Office of Fair Trading. DAILY MAIL

Household energy bills rise 4% while price paid for gas and electricity by Big Six suppliers falls by up to 20%

Consumer organisation Which? executive director, Richard Lloyd, said: 'The Competition and Markets Authority should now investigate how the independent regulator could establish a price people can trust that will spur suppliers to compete and reassure worried consumers that they're not being ripped off.’ MPs also discovered earlier this month that energy customers face a £215 bill for the installation of smart meters that will only save them around 3 per cent on their average annual bill by 2030 – a much smaller saving than had been predicted. Public spending watchdog, the Commons public accounts select committee, estimated the smart meter rollout will cost £10.6billion for the actual meters, with households forking out up to £11 running costs a year, plus the £215 cost of installing the meter. DAILY MAIL

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