Thursday 13 November 2014

Thursday, November 13, 2014 Posted by Jake No comments Labels:
Posted by Jake on Thursday, November 13, 2014 with No comments | Labels:

300,000 more people live in poverty than previously thought
The study by the Institute for Fiscal Studies (IFS) for the Joseph Rowntree Foundation said the government method for calculating absolute poverty – the number of people living below a breadline that rises each year in line with the cost of living – incorrectly assumed that all households faced the same inflation rate. But in the six years from early 2008 to early 2014, the cost of energy had risen by 67% and the cost of food by 32%. Over the same period the retail prices index – a measure of the cost of a basket of goods and services – had gone up by 22%. Therefore, the soaring prices for food and fuel over the past decade have had a bigger impact on struggling families who spend more of their budgets on staple goods. The IFS report said the poorest 20% of households spent 8% of their budgets on energy and 20% on food, while the richest 20% spent 4% on energy and 11% on food. In contrast, poorer households allocated 3% of their budgets to mortgage interest payments, which have fallen by 40% since 2008 due to the cut in official interest from 5% to 0.5%. Richer households spend 8% of their budgets on servicing home loans. As a result, the IFS concluded that since 2008-09 the annual inflation rate faced by the poorest 20% had been higher than it was for the richest 20% of households. That meant the official measure of absolute poverty understated the figure by 0.5% – or 300,000. GUARDIAN

Six banks fined £2.6bn by regulators over manipulation of foreign exchange rates
HSBC, Royal Bank of Scotland, Swiss bank UBS and US banks JP Morgan Chase, Citibank and Bank of America have all been fined. A separate probe into Barclays is continuing. The fines were issued by the UK's Financial Conduct Authority (FCA) and two US regulators. FCA boss Martin Wheatley told the BBC: "This isn't the end of the story... The individuals themselves will face the consequences." Several senior traders at the banks have already been put on leave and the Serious Fraud Office is in the process of preparing potential criminal charges against those alleged to have masterminded the scheme. The fines follow a 13-month investigation by regulators into claims that the foreign exchange market - in which banks and other financial firms buy and sell currencies between one another - was being rigged. The massive market, in which $5.3 trillion worth of currencies are traded daily, dwarfs the stock and bond markets. About 40% of the world's dealing is estimated to go through trading rooms in London. The FCA said the "tight knit groups" formed by traders at the different banks had described themselves as "the 3 musketeers", "the A-team" and "1 team, 1 dream". However, Professor Mark Taylor, a former foreign exchange trader and now dean at Warwick Business School, said the fines were "relatively small beer for banks that regularly report billions of dollars in annual profit... The interesting thing is that there are no individuals named as yet, and no individual prosecutions. This is still a possibility and it will be interesting to see how that pans out. At the moment, it's really only the shareholders - which in the case of RBS means British taxpayers - who suffer from these fines." BBC NEWS

Greencore: Sandwich maker to hire from Hungary, despite government funding for UK job creation
Greencore, which makes 430m sandwiches a year for Marks & Spencer, Waitrose, Sainsbury’s, Tesco, Asda and others, said very few local people had applied for jobs at its new £30m Northampton factory so on Monday executives began a recruitment drive in Budapest, Hungary. This is despite Greencore, the UK’s biggest sandwich-maker, benefited from a slice of £107m in government funding designed to create more jobs for the people of Northamptonshire. The new recruits –sandwich makers, cleaners, porters and quality controllers – are being hired for Greencore’s new £30m factory, which is due to open in 2016. Its adverts say recruits will be required to work nights and weekends as the factory makes sandwiches round the clock. About 10% of the jobs will pay the minimum wage of £6.50 an hour for those aged 21 and over. Margot Parker, Ukip MEP for the east Midlands, said: “Why is Greencore recruiting 300 workers from Hungary to open a factory in Northampton, when 500 people in Corby lost jobs doing same job this year? ...It looks like a prime example of job displacement, facilitated by our membership of the EU and a company which wants the cheapest labour available. It is hard to justify saying there is lack of skilled people in the area when 500 workers just up the road doing the same job recently lost their jobs and are willing to work.” GUARDIAN

100,000 attend Brussels anti-austerity protest, ends in clashes
Belgian police used tear gas and water cannon against violent anti-austerity protesters in central Brussels after a largely peaceful march by about 100,000 workers. Several vehicles were set alight by protesters who also hurled stones and flares at police. About 50 people were hurt and 30 detained, officials said. Belgium's new government plans to raise the pension age, freeze wages and make public service cuts to meet EU targets. Thursday's march was one of Belgium's biggest labour demonstrations since World War Two. Steelworkers, dockers and teachers were among the thousands who took part, protesting against government austerity policies. The march marked the start of a month-long campaign by trade unions and is to be capped with a national strike on 15 December. The centre-right government of Prime Minister Charles Michel says the tough austerity measures are necessary to keep the budget deficit down. But Marie-Helene Ska, secretary general of the union CSC, said the government had to look elsewhere for the cash. "The government tells us and all of the parties tell us that there's no alternative. We don't contest that they have to find 11bn euros (£8.6bn; $13.6bn) but we've been saying for a long time that it's possible to find this money elsewhere, rather than in the pockets of the workers." BBC NEWS

Payday loan companies face 'annihilation' as tough new rules introduced
The Financial Conduct Authority (FCA) has announced fees will be restricted to £15 as well as an interest limit of 0.8 per cent a day on unpaid balances. The decision was initially unveiled in July, but it has been confirmed after a consultation period. Dr John Gathergood, of the Nottingham School of Economics, carried out the research that underpinned the FCA's landmark announcement. He predicted many would now go out of business, and said the moneylenders face "annihilation" if they do not change their ways. The £2.8 billion sector has come under intense scrutiny amid outrage over the way that some consumers have been treated. Many of the problems found by regulators have revolved around people taking on payday debt they cannot afford, meaning the loan is then rolled over and the original cost balloons. FCA chief executive Martin Wheatley said: "For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts.” The moves have been welcomed by consumer groups, although the industry has raised concerns that the crackdown will limit choice for borrowers who will be forced to turn to loan sharks or lenders operating outside the UK. EXPRESS

Spread the Warmth: Age UK launches campaign, revealing one older person dies needlessly every seven minutes from the cold in winter
Age UK estimates that 1.7 million older people in the UK can’t afford to heat their homes, and over a third (36%) of older people in the UK say they live mainly in one room to save money. Cold weather adds to the financial worries of older people. 30% say they avoid heating rooms like the bedroom, bathroom or living room because they are worried about the cost. The UK has some of the worst levels of home energy efficiency in Europe, and other much colder countries have much lower death rates in winter than the UK because their homes are better insulated. With high quality insulation and modern technology, millions of UK homes could be made much warmer. And the Government could pay for this using the billions of pounds they already raise in carbon taxes. This would bring down bills, and above all, help millions of older people keep warm and healthy through the winter. AGE UK

CBI conference: Increase free childcare, cut taxes for the low paid, business leaders urge
The CBI said the slow pace of the UK's economic recovery had "hit people's finances hard", and "immediate help" from the government was needed. The CBI's director general, John Cridland, said the UK needed to "face up to some real long-term challenges" including greater competition from abroad, and changing demands for skills from industries. But he said shorter-term measures were needed alongside long-term plans to help low-paid households still struggling in the wake of the recession. He said: "To ease the pressure on families and people on low incomes, we want immediate action, including cutting employee National Insurance and making childcare more affordable." The average couple with two children saw their income fall by £2,132 a year in real terms between 2009-10 and 2012-13, the CBI says. CBI deputy director general Katja Hall told the BBC: "The package we have put out in the report is completely affordable within the next parliament". She added that the childcare proposals the CBI was making would cost £0.3bn. Also speaking at the CBI conference was the Archbishop of York, John Sentamu, who is chair of the Living Wage Commission. Dr Sentamu said that most businesses could afford to pay the Living Wage - which is calculated at £9.15 an hour in London and £7.85 outside. "It has become clear that the minimum wage (£6.50) is inadequate," he said. Dr Sentamu said that income inequality in Britain was dividing the country into have and have-nots, with people living in separate worlds. He told business leaders at the conference that "income inequality is a giant we must slay together". BBC NEWS

Luxembourg tax files: how tiny state rubber-stamped tax avoidance on an industrial scale
An unprecedented international investigation into tax deals struck with Luxembourg has uncovered the multi-billion dollar tax secrets of some of the world’s largest multinational corporations. A cache of almost 28,000 pages of leaked tax agreements, returns and other sensitive papers relating to over 1,000 businesses paints a damning picture of an EU state which is quietly rubber-stamping tax avoidance on an industrial scale. The documents show that major companies — including drugs group Shire, City trading firm Icap and vacuum cleaner firm Dyson, who are headquartered in the UK or Ireland — have used complex webs of internal loans and interest payments which have slashed the companies’ tax bills. These arrangements, signed off by the Grand Duchy, are perfectly legal. The documents also show how some 340 companies from around the world arranged specially-designed corporate structures with the Luxembourg authorities. The businesses include corporations such as Pepsi, Ikea, Accenture, Burberry, Procter & Gamble, Heinz, JP Morgan and FedEx. Leaked papers relating to the Coach handbag firm, drugs group Abbott Laboratories, Amazon, Deutsche Bank and Australian financial group Macquarie are also included. GUARDIAN

London Oyster users 'charged more' to travel in capital
London Assembly Member Val Shawcross said a discrepancy had arisen between pay as you go (PAYG) Oyster cards and contactless bank cards. While Transport for London (TfL) has introduced weekly caps on contactless cards, only daily caps apply on Oyster. Analysis from the Labour party found passengers using PAYG fares travelling between zones 4 and 7 during peak-time seven days a week would pay £121.20. Passengers travelling between the same zones but using contactless would spend £29.40. Similarly, commuting through zones 1-4 on a seven-day basis would cost PAYG commuters £68.40 while contactless payment users would be charged £45. Transport for London's director of customer experience Shashi Verma said: "The same fares apply to both contactless and Oyster”. But he admitted that you have to buy an Oyster Travelcard to get that same weekly fare cap:  "If a customer uses contactless for a week within zones 4 to 7 they will get their fare capped at £29.40.If a customer buys a weekly Travelcard on their Oyster card for zones 4 to 7 they will also pay the same fare of £29.40... We are looking at introducing weekly capping on Oyster when the current technology can be updated. This is a complex process as it requires changes not only to the card readers but also to our back office and retailing systems." A TfL survey found only 26% of Londoners had made a payment with a contactless card and, according to Ffrees Family Finance, 440,000 Londoners do not have bank accounts and would be ineligible for contactless payment cards. BBC NEWS

Remembrance Day: UK's armed forces face new spending crunch
The chancellor, George Osborne, will have to make even deeper cuts in the army as savings needed to meet his austerity targets would have to nearly double to £48bn, the Financial Times reported on Monday. Unlike health, education, and overseas aid, the UK defence budget, currently £36.4bn, is not ring-fenced. The chief of the UK defence staff, General Sir Nick Houghton, over the weekend hinted at serious trouble to come. "I think we are good value for money and I will quietly, from inside the system, fix my bayonet and fight to the last," he warned. The government announced in 2010 it would reduce defence spending by about 8%, slashing the size of the army by 20%, to 82,000, and hoping to increase the size of the reserves by more than 10,000 to 30,000. In his first annual Christmas lecture at the Royal United Services Institite as chief of the defence staff, Houghton last December warned, in what he called "an outing of professional conscience", that Britain was being left with hollowed-out armed forces. GUARDIAN

An end to bank bailouts? 'Too big to fail' bank rules unveiled by global regulators
The rules, created by the Financial Stability Board (FSB), a global regulator, will require big banks to hold much more money against losses. Mark Carney, FSB chairman and governor of the Bank of England, said the plans were a "watershed" moment. He said it had been "totally unfair" for taxpayers to bail out banks after the financial crisis of 2008 and 2009. "The banks and their shareholders and their creditors got the benefit when things went well. But when they went wrong the British public and subsequent generations picked up the bill - and that's going to end," he told the BBC. Mr Carney explained that the new system would ensure that bank shareholders, and lenders to banks such as bondholders, would become first in line to bear the brunt of future losses if banks could not pay out of their own resources. The proposed new rules, which are up for consultation and should take effect in 2019, require "global systemically important banks" to hold a minimum amount of cash to ensure they will be able to survive big losses without turning to governments for help. The capital set aside should be worth 15-20% of the bank's assets, the FSB said. That is a far bigger cushion against losses than is required by current banking rules. BBC NEWS


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