Rip off News round-up. Our pick of the last week's media (Thu 27th November)

300,000 paid less than minimum wage. Yet in the past year, no companies were prosecuted

The Annual Survey of Hours and Earnings for the Office for National Statistics recently found that about 287,000 workers were paid at less than the minimum wage in 2012, although the TUC puts the figure closer to 350,000. But despite ministers’ claims that the government is getting tough on under-payers, the last successful criminal prosecution was in February 2013. That was one of only two prosecutions during the government’s entire term of office to date, according to figures given to parliament. The cases involved the imposition of fines to the value of £3,696 on an opticians in Manchester and £1,000 on a security company in London. Failing to pay the minimum wage was made a criminal offence in 2007. Under Labour, seven organisations were prosecuted, including Torbay council. HM Revenue and Customs (HMRC) said that only the most serious breaches of the national minimum wage are prosecuted. But because the average cost of a successful prosecution was around £50,000 HMRC believed it was preferable to focus on recouping wages for workers through civil penalty powers. HMRC conducted 1,455 investigations in 2013-14, securing over £4.6m in wage arrears for over 22,000 workers. The number of HMRC staff enforcing the minimum wage now stands at 194, which is 40 more than in 2009-10. GUARDIAN

Business organisation IoD attacks 'excessive' £25m pay deal for new head of BG Group (British Gas)

A proposed £25m pay package for the new head of oil and gas giant BG Group has been branded "excessive" and "inflammatory" by the Institute of Directors (IoD). Simon Walker, director general of the IoD, said Helge Lund's deal would damage the reputation of UK business. The IoD acknowledged its criticism was strong, coming from a body whose job is to promote the interests of UK firms. Speaking to the BBC, Walker said: "We think in any terms this £25m pay settlement is grossly excessive, it will inflame public sentiment , it will be a red rag to the critics of capitalism." He added that the timing of the deal, so close to a general election, could put executive pay on the political agenda. "It damages the reputation of British business as a whole to behave in this cavalier fashion, that has no regard for strongly held public sentiment... this is six months before a general election, in which you have an opposition that is already campaigning vigorously against big business." Mr Walker said the £25m sum was especially excessive given BG's size. Chief executives at the much-larger Royal Dutch Shell and BP have smaller pay packages. The IoD has raised eyebrows before with criticism of pay and bonus issues at Barclays and Sports Direct. But an IoD accepted that this BG criticism was its strongest yet of a major company. Some BG shareholders have also voiced concern about the size of the annual pay package being offered by the FTSE 100 company. The Investment Management Association, a body representing shareholders, issued a "red top" alert - a warning about potential corporate governance breaches. BBC NEWS

European Commission boss Juncker on defensive over Luxembourg tax deals, struck when he was PM

Jean-Claude Juncker’s fitness to head the EU’s executive for the next five years came under lacerating attack in the European parliament on Monday evening, with British, French and Italian far-right and populist leaders denouncing his record in facilitating massive corporate tax avoidance when  he was Prime Minister of Luxembourg for almost two decades. The details of Luxembourg’s record as a centre for tax avoidance came in leaks of more than 28,000 documents that revealed how the authorities, headed by Juncker, reached agreements with more than 300 global companies allowing them to minimise their liabilities.  But despite the damage to Juncker’s credibility the leaders of the biggest caucuses in the parliament, the Christian and social democrats, made plain that they supported him and sought to use the debate to turn their fire on the anti-EU far right. Meanwhile, Luc Dockendorf, a Luxembourg diplomat with the United Nations, emerged as one of the few figures within the Grand Duchy establishment to voice criticism of the country’s record on taxing multinationals. Writing in the Luxembourger Wort, a paper traditionally supportive of Juncker, he and Benoît Majerus, a historian at the University of Luxembourg, said: “We’ve been living at the expense of others. Not just other states, but other people, like ourselves, who have been paying their taxes, while corporations in their own countries have been dodging them. It is no longer possible to pretend that the Luxembourgish model has no negative consequences for other countries.” Gabi Zimmer of Germany’s hard-left Die Linke pointed out that 22 of 28 EU countries operated tax avoidance schemes similar to Luxembourg’s, if not on the same scale. But she blamed the commission chief for encouraging the practices: “It’s the Juncker system, that’s the problem.” GUARDIAN

MPs back opposition bill in attempt to limit NHS 'privatisation'

Under the bill, compulsory tendering for NHS contracts would end and NHS hospitals' income generated by private patients would be restricted. It would restore ultimate responsibility for the NHS to the health secretary, stop NHS hospitals earning up to 49% of their income from private patients, and would exempt the NHS from an EU-US trade treaty known as TTIP. Critics fear TTIP could lead to American companies suing future governments for reversing privatisation. Those who voted in favour of the bill included two Conservative and seven Lib Dem rebels. The bill also drew support from newly elected UKIP MP Mark Reckless, saying he had previously been "guilty of having believed the undertakings I was given by those on the government frontbench" about the NHS reforms. Although MPs backed it in a vote by 241 to 18, as a private member's bill – brought by Labour MP Clive Efford -  it has only a slim chance of becoming law. But shadow health secretary Andy Burnham promised that even if the bill did not become law, Labour would repeal the 2012 Act. BBC NEWS

Pensions hoodwink: New rules to help workers save for retirement will leave them worse off than they are told - by up to £90,500

Employees are being hoodwinked over the amount of money going into their workplace pensions because of the way the contributions are calculated – and as a result will retire on smaller sums than they expect. Under auto-enrolment, the flagship scheme launched two years ago by the Government to encourage nine million workers into saving for retirement for the first time, employees are routinely told that contributions worth 8 per cent of their annual pay will eventually be diverted into their savings pot. But what many savers fail to realise is that contributions are typically worked out on a specific band of their earnings, not their full pay. Chief executive of NOW Pensions, Morten Nilsson, says: ‘The 8 per cent contribution rate is regularly quoted but the reality is nobody will actually get a full 8 per cent – the most anyone gets is 6.9 per cent if they are exactly at the top of the earnings band, with somebody earning £10,000 only receiving a total contribution of 3.4 per cent, which is woefully inadequate.’ This method of calculation means an average earner on £27,000 a year will lose out on the benefit of up to £90,500 in pension contributions by the time they retire. DAILY MAIL

Credit card firms probed on fears they profit from keeping borrowers in debt and offering them credit they don't want

A probe into whether credit cards are being sold in a way which exploits people’s tendencies to take on too much debt is to be launched by the City regulator, the Financial Conduct Authority (FCA). A key concern of the FCA is that companies make excess profit from those who over-borrow and under-repay - meaning they remain in a level of debt that creates interest and other fees for the lender, but without making the repayments to clear the debt. Credit card firms must require borrowers make minimum repayments, but these are only set at a level to cover the interest and fees, plus 1 per cent of the balance. Repaying any debt at this rate would take more than eight years. A worry is that card firms target more of these customers so they can subsidise others for whom using a credit card is free because they repay borrowing in full each month. Another area of interest will be how credit cards are sold, and whether firms are made to compete on price. The FCA is concerned that even those who compare cards through price comparison websites do not really know the fees and interest rates charged because this is only confirmed once they have been accepted and offered the card, and is often different from the headline rate. Additionally, customers may search for a credit card for one purpose, for example to transfer an existing balance, but then be offered a card that could lead them into more debt. For example, if it included and period of interest-free purchases. The practice of offering a higher credit limit unsolicited to borrowers will also be looked at. The regulator said: 'We will look at whether credit cards are marketed and sold in a way that exploits or exacerbates consumer behavioural tendencies with respect to over-borrowing.' DAILY MAIL

Scotland 'should set own income tax', says Smith Commission. Tories, LibDems, Labour agree

The Scottish Parliament should have the power to set income tax rates and bands, the body on strengthening devolution has concluded. The Smith Commission also said a share of VAT should be assigned to the parliament, and Air Passenger Duty fully devolved. The commission was set up by Prime Minister David Cameron in the wake of the vote against Scottish independence. Its findings will form the basis of legislation on more Scottish powers. The UK government welcomed the report, but Scottish ministers said it fell short of what the nation needed to flourish. The Scottish government said any new powers were to be welcomed, but First Minister Nicola Sturgeon argued the Smith Commission package was ultimately disappointing because many powers, like the personal tax allowance, corporate taxation and child and working tax credits, would remain with Westminster. Speaking at Holyrood, she said: "70% of our taxes continue to be set at Westminster, 85% of social security controlled at Westminster - this parliament responsible for less than half of the money we will spend.” The Smith Commission recommendations are being backed by the three major parties. Shadow Scottish secretary Margaret Curran said the Smith report was, "a promise kept and an agreement delivered." BBC NEWS

Forcing small businesses out of business: RBS apologises for 'incorrect' evidence to MPs

RBS was facing allegations that its global restructuring group (GRG) forced customers out of business so it could buy their assets and make a profit. Giving evidence in June to the Treasury Committee, senior directors Derek Sach and Chris Sullivan denied it was run as a profit centre. However, in a July letter, Mr Sullivan admitted it was run in this way. In a letter to Andrew Tyrie MP (the treasury Committee chairman), written in August but released yesterday, RBS chairman Sir Philip Hampton wrote: "This lack of clarity on a very important point is very disappointing to the committee, as it is to me, and I apologise for it." The apology caps a difficult few days for RBS. On Friday, it said it had miscalculated the results of a stress test by the European Banking Authority. A day earlier, RBS was fined £56m for a 2012 IT failure. TELEGRAPH

Boycott Amazon over Christmas: campaign gathers momentum

The anti-Amazon campaign group Amazon Anonymous says that more than 2,000 people have pledged not to shop at the online retailer this Christmas, just one day after it launched its latest drive. “They don’t pay their workers a living wage,” claim Amazon Anonymous in their appeal to join the Amazon-free challenge, which launched on Tuesday. “They dodge their tax. They take money away from our local shops. So this year, let’s take our money away from them.” The campaigners are asking supporters to avoid shopping at Amazon from 1-25 December, because “Christmas is Amazon’s busiest time of year – and it’s also our best chance to disrupt their business”. The retailer paid £4.2m in tax last year on sales worth £4.3bn, a situation described as an outrage by Margaret Hodge, chair of the public accounts committee. Amazon Anonymous previously gathered more than 65,000 signatories to a petition calling on Amazon to “deliver the living wage in 2014”, at the time set at £7.65 an hour outside London. Amazon has said on its website that “in the UK, permanent associates start at a minimum of £7.10 per hour increasing to a median of £8.00 per hour after 24 months”. Amazon Anonymous also launched a dummy book on Amazon’s own site protesting about the company’s treatment of its workers. GUARDIAN