Charles Dickens' A Christmas Carol. Adapted for our troubled times

Our 6-cartoon Christmas Special. Starring Cameron, Clegg, Thatcher, Osborne, and Duncan Smith, with cameos by the Great British Public...

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 25th December)

Christmas victory for New Era residents' campaign: rent-hiker Westbrook finally sells London estate to fair-rent charity

The 93 families’ battle against eviction by an $11bn US investor has finally been successful. Months of protesting, marching and petitioning has forced the millionaire executives of Westbrook Partners to sell the estate, abandoning plans to evict families and triple rents. Some tenants of the estate, just north of the City of London, had faced rents tripling from £800 a month for a two-bedroom flat to about £2,400 if Westbrook’s plans had gone through. The new owner was announced as the Dolphin Square Foundation, a charity dedicated to providing affordable homes for low and middle income Londoners. It instantly pledged to keep rents at their current low rates not just this Christmas but next Christmas too. The deal means Westbrook has sold an estate it bought nine months earlier for an estimated £20m to a relatively small housing group that says it is committed to delivering low-cost rented homes to Londoners on low to middle incomes. Jon Gooding, the chief executive at Dolphin, said: “We are serving people who are not on benefits but are earning £25,000 to £60,000, but we are setting rents that are realistic in relation to their net income. We will work to understand in detail the financial circumstances of our tenant group and we will then formulate a rent policy that is demonstrably fair.” Lindsey Garrett, an NHS worker and one of three women who spearheaded the campaign, said: “We beat a multibillion-dollar investment company. Who would have thought three single mothers from Hoxton could have done that?” Outside the Stag pub where choruses of “We are the champions” rang out, Coleen O’Shea put it more bluntly to another of the campaign’s leaders, Lynsay Spiteri. “Well done girl, you did it,” O’Shea said. “You shot them up the arse.” GUARDIAN

Cost of ministers' special advisers hits £8.4m

There are now 103 "spads" employed to give advice over and above the work carried out by civil servants, up from 98 last year. They include a total of 26 working for David Cameron in Downing Street and 20 working for Nick Clegg. The government said it reflected the "nature of coalition" and that their average pay was higher under Labour. Labour said the figures showed that the overall numbers of special advisers had risen inexorably under the coalition. This year’s total salary bill is over a million higher than the £7.2m spent in 2012-13. The Coalition Agreement said the government would "put a limit on the number on special advisers" but the pay bill and numbers have increased over the past few years. BBC NEWS

Forex manipulation: First banker arrested in $5.3 trillion fraud investigation

A London banker is believed to be the first person arrested in relation to the criminal investigation into rigging the $5.3 trillion a day foreign exchange market. The Serious Fraud Office confirmed that a man was arrested in Billericay, Essex, on Friday. No other details about the arrest were given. The SFO opened an investigation into foreign exchange manipulation in July, and last month six banks were fined £2.7bn related to currency rigging. Dozens of bankers have been suspended or fired in relation to forex manipulation, but this is believed to be the first arrest. Chat logs published by the Financial Conduct Authority last month showed how traders at Royal Bank of Scotland, HSBC, Citibank, UBS and JP Morgan, using nicknames such as “the A-team”, collaborated to rip off clients. After the fines, George Osborne wrote to the SFO saying it would be given a blank cheque to investigate wrongdoing. In the other major rigging scandal, Libor manipulation, one criminal conviction and 13 charges have been made. TELEGRAPH

Pre-payment meters: The poorest cannot spread their winter energy bills like most customers

Most households can spread their payments throughout the year. But pre-pay customers must spend twice as much on winter gas bills as in the summer, often plunging them into debt. Citizens Advice said all suppliers should allow pre-pay customers to pay off winter debts in the summer period - when their bills are lower. One supplier - Scottish Power- said it had already introduced a scheme last year. "A debt holiday would be a Christmas bonus for pre-pay customers," said Gillian Guy, the chief executive of Citizens Advice. It might also prevent pre-payment customers being forced to turn off their central heating. Delaying payments for debts will take the pressure off those people struggling to afford heat and light, or cutting back on food and other essentials. An analysis of figures from the regulator, Ofgem, shows that 80% of households having payment meters installed are already in debt. BBC NEWS

Read More

Financial Services Regulators' heads and bonuses roll, punished for suggesting they might Regulate Financial Services.

Standing watch over the British Consumer

"No good deed ever goes unpunished": A cautionary tale from the Financial Conduct Authority (FCA) for Christmas and beyond. 

In December 2014 FCA heads rolled and FCA bonuses were cancelled. Was it due to a failure to show adequate Authority over a firms' Financial Conduct? To find out, we travel ten months back in time.


In February 2014 the FCA published a review of the pensions annuities market. It had noticed there was something rotten going on, and it thought it was about time it thought about looking into doing something about it. But more of this later.

On 27th March 2014 the FCA briefed newspapers, about another insurance industry scam saying:

“We want to find out how closed-book products [products that are no longer being sold afresh but still have existing customers, such as long term investment products] are being serviced by insurance companies, as we are concerned insurers are allocating an unfair amount of overheads to historic funds. 

As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten. We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges.”

"Intervene on exit charges"!? The prospect of regulators actually doing something to protect consumers shocked the market. There is a sacred covenant in the financial industry that regulation in Britain is the thin end of a thin wedge. Was the covenant being broken? Fearing for their dividends, investors started selling and insurance company share prices plummeted. 

Read More

Luxembourg to prosecute a tax dodge accountant!.. but not for dodging any taxes

KJ learns how the world really works from Fee and Chris...

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 18th December)

British household debt is £1.7 trillion: we are living further beyond our means than at almost any time in the last 20 years.

The head of the Office for Budget Responsibility (OBR), Robert Chote, told a panel of MPs that consumers have been upping their spending, which in turn helps improve the growth of the economy. But the increased expenditure does not mean that households have more cash to spare – they are just using their savings. He added: ‘We have assumed that it is not plausible [that this could continue].’ Consumer spending grew by 2.1 per cent in the first nine months of this year, even though wages continued to stagnate, figures from the OBR show. The economists estimate that the huge gap between earning and spending is the second largest since the mid-1990s. Total household debt stood at £1,670billion as of the second quarter of this year. The OBR has increased its forecast of unsecured household debt as households continue to spend beyond their means. The forecasts come as debt experts warned that as many as one in four credit card customers are paying the minimum every month or struggling to pay at all. One in five respondents with a credit card said they only made the minimum payment in October, while a further one in 20 said they made no payment or paid off less than the minimum. DAILY MAIL

Luxembourg tax dodge whistleblower charged with theft, says he acted out of conviction

28-year-old Antoine Deltour has been charged in Luxembourg with a string of criminal offences including theft, violation of professional secrecy, violation of trade secrets and illegally accessing a database. Deltour joined PwC from business school in 2008 and resigned two years later. He said: “Normally auditors are a bit like regulators. It is a useful profession, we verify the accounts of companies... But I wasn’t feeling at home in that environment [at PwC]. Bit by bit I discovered how extreme the system was in reality – it was a massive tax optimisation practice. I didn’t want to be part of that.” Last month the Guardian and more than 20 news media around the world, in conjunction with the International Consortium of Investigative Journalists (ICIJ), published detailed investigations into the tax affairs of several multinationals, based on leaked tax rulings secured by PwC for large clients. Luxembourg’s finance minister Pierre Gramegna has described the affair as “the worst attack Luxembourg has experienced in its history”. But his counterparts in France, Germany and Italy suggested the revelations had brought Europe to an “obvious … turning point” in the international debate on unfair tax competition. “Since certain tax practices of countries and taxpayers have become public recently, the limits of permissible tax competition between member states have shifted,” they said in a letter to Pierre Moscovici, European commissioner with responsibility for tax. “This development is irreversible.” The Guardian and other media working with the ICIJ had this month published more revelations and further confidential tax rulings secured by Ernst & Young, KPMG and Deloitte. GUARDIAN

It’s expensive being poor: Poorest households face fastest cost of living rise

The Office for National Statistics (ONS) said that households in the bottom 10% of the income scale had an average annual inflation rate of 2.9% each year from January 2003 to October 2014. This compared with an inflation rate of 2.6% among the wealthiest 10% of UK households. Caroline Abrahams, charity director at charity Age UK, said: "Because older and lower income groups spend a greater proportion of their income on essentials such as food, fuel and energy, they are far more vulnerable to the price increases we have seen to these items since 2003... With 1.6 million pensioners living in poverty and a further one million just above the breadline, many are struggling to afford the basics, let alone anything else." When categorising households by how much they spend, rather than their income, the top 10% of households saw prices rise, on average, by 2.3% over the same period. This compared with 3.7% among the 10% of households which spent the least. Households with children saw the cost of living rise by 2.4% on average each year, compared with 2.7% for those without children. Non-retired households saw prices rise on average by 2.5%, compared with 2.8% for retirees. BBC NEWS

The average UK property price rose more in 2014 than the average worker earns in a year – and London is the worst

The average worker took home £27,271 this year, having seen their wages grow just 0.6 per cent – or £169 - compared to 2013, the study by the Centre for Economics and Business Research for the Post Office found. Yet steep property inflation means the average house price now stands at £272,952, up £29,339 from £243,613 last year. Therefore, more than three in five workers earned less than the average house price rise. To give some examples, starting salaries for junior hospital doctors, graduate nurses, teachers, police officers and soldiers are all less than £23,500. Homeowners in the East, South East and London saw their homes earn far more than average wages in the area. Property values in London, for example, have added an average of £80,452 - almost twice the average salary of £41,095 earned in the capital. In fact, booming property in London earned more than the average fully qualified doctor. Elsewhere, estate agents Marsh and Parsons predicts a slowdown of growth when it comes to prime London property next year, but says London rents will soar by around 10 per cent during the course of 2015. DAILY MAIL

Read More

Graphs at a glance: OECD report shows greater inequality is bad for growth. So why are the Tories pushing up inequality by cutting back the welfare state?

J.P.Morgan, in his time a successful banker, said:

“A man always has two reasons for doing anything. The good reason, and the real reason”.

“Doing”: The Tory led government is squeezing benefits by freezing, cutting and capping them.

They claim “the good reason” is to push the feckless unemployed off their dependency on benefits into jobs. Make them economically productive, thereby boosting their own incomes as well as our national GDP.

Now we at Ripped-Off Britons like to think the best of people. It is just about plausible that Tory policy makers actually don’t realise that benefits go mainly to the low paid not the unemployed. Benefits are far more a subsidy to low paying employers than a subsidy to the unemployed. But for this post let’s not go there – we go there in other posts.

For now we take a closer look at whether cutting benefits actually does improve the prospects of the poor and boost Britain's GDP. The Organisation of Economic Cooperation and Development (OECD) published a report in December 2014 which provides a helpful insight.

Benefits are paid by taxes. It is a transfer of money from the richer to the poorer, and therefore reduces the income inequality gap. Office for National Statistics (ONS) figures show UK inequality is reduced by these transfers from a Gini of over 50 (like Brazil, Bolivia, Botswana) to under 35.

ONS Figures

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 11th December)

Blackmail: Premier Foods promises to rethink controversial 'pay-and-stay' fees imposed on suppliers after widespread condemnation by business leaders

Last week, the BBC's Newsnight disclosed that Premier, one of the UK's biggest food manufacturers, had asked for money from its suppliers, otherwise it would end their contracts. One supplier called it "blackmail", and the government said it was "deeply concerned". The employers' association, the Institute of Directors, said the scheme risked adding to the public's loss of faith in business. The Federation of Small Businesses warned that small businesses were being crippled by such practices. Now Premier has said it is willing to alter the scheme, which was part of its Invest for Growth programme, launched last year to revive the company's ailing finances. The practice of pay-and-stay is not unusual in manufacturing and retailing. After a competition inquiry, tighter rules were issued for the supermarkets under the Groceries' Code. But that applies to the relationship between supermarkets and suppliers, not to manufacturers like Premier. BBC NEWS

British workers suffer biggest real-wage fall of major G20 countries

The International Labour Organisation reports that in the three years to 2013 UK wages fared worse than most of the eurozone’s crisis hit economies. According to recent data released by the Office for National Statistics (ONS), wages in the UK fell 1.6% this year compared to 2013, marking a sixth straight year of declining levels of pay. The Bank of England said in its latest quarterly inflation report last month that the fall in pay, while acutest among lower skilled workers, has been registered in most parts of the labour market. Weaker-than-expected pay growth in Britain has generated lower than expected tax revenues for the government. This is a main reason why Chancellor George Osborne did not meet his deficit reduction target. GUARDIAN

MPs accuse PriceWaterhouseCoopers chief Kevin Nicholson of lying over tax dodge deals

Kevin Nicholson is PwC UK’s head of tax, and worked as an HM Revenue and Customs tax inspector in the early 1990s. In January 2014 Nicholson told parliament’s Public Accounts Committee that PwC did not “mass market” tax products or sell tax avoidance “schemes” to clients. But in November this year, new evidence revealed that PwC wrote hundreds of letters - 548 letters relating to 343 companies –to Luxembourg tax authorities to agree on how their clients structured their businesses for tax purposes. “It’s very hard for me to understand that this is anything other than a mass-marketed tax avoidance scheme,” said the committee’s chair, the Labour MP Margaret Hodge. “I think there are three ways in which you lied and I think what you are doing is selling tax avoidance on an industrial scale.” Nicholson denied lying to parliament, and added: “At the heart of the Luxembourg economy now is an economy that is based around businesses going there to finance [and] to hold investments… I’m not here to change the Lux tax regime. If you want to change the Lux tax regime, the politicians could change the Lux tax regime.” Last month’s analyses of the way multinational companies establish businesses in Luxembourg were based on a leaked cache of hundreds of tax rulings secured by PwC Luxembourg that showed major companies – including drugs group Shire Pharmaceuticals and vacuum cleaner firm Dyson – using complex webs of internal loans and interest payments, which have greatly reduced tax bills. GUARDIAN

Lords refused to cut costs by sharing catering services with MPs because they feared the quality of champagne "would not be as good"

Sir Malcolm Jack, the clerk of the Commons between 2006 and 2011, told MPs that there was a proposal to merge the two catering services when he was in office to save taxpayers' money. He said: "It [the proposal] was eventually thrown out because the Lords feared the quality of champagne would not be as good if they chose a joint service." Since 2010, the House of Lords has spent £265,770 on 17,000 bottles of champagne – equivalent to just over five bottle of bubbly for each peer. As of March this year, the house had 380 bottles in stock worth £5,713, predominantly held in its main cellar. The most expensive, the Chassagne-Montrachet premier cru, costs £26 per bottle. The House of Commons has spent even more on champagne, buying a total of 25,000 bottles at a cost of £275,221. As of March it had 582 bottles in stock, worth a total of £6,513. TELEGRAPH

Read More

Global taxpayers and honest businesses stump up to cover the countless billions lost to “industrial scale” tax dodging

Read More

Graphs at a glance: NAO report shows public spending cuts are pushing the NHS into a black hole of deficit

The Office of Budget Responsibility's "Economic and Fiscal Outlook 2014", published in December 2014, stated that by 2019-20 public spending as a share of GDP will fall back below its lowest level since the Second World War. 

When questioned about this on BBC Radio4's Today Programme George Osborne retorted "Has the World fallen in? No it has not!". If Osborne's measure of economic success is the World not "falling in", perhaps he isn't doing so badly. Others may use other measures.

We are in a 'low wage recovery', where the rewards of relatively strong GDP growth are being kept by the few. Lower wages for the many and lowering tax rates for the few (top rate income tax and corporation tax) means no increase in government receipts.

The OBR put this planned collapse in spending in pounds and pence:

"Between 2009-10 and 2019-20, spending on public services, administration and grants by central government is projected to fall from 21.2 per cent to 12.6 per cent of GDP and from £5,650 to £3,880 per head in 2014-15 prices."  

Read More

Graphs at a glance: Government reforms of Higher Education and Family Health created thousands more Administrator jobs, but no more teachers or nurses.

Some interesting graphs we stumbled across during our general research show how Administrators have been the big winners from reforms in both the Higher Education and the Family Health sectors.

It would be interesting to know if this is the case in other areas of the Public Sector. If you come across any more, please email them to us to graphs@rippedoffbritons.com

1) National Audit Office report, "Further education and skills sector: implementing the Simplification Plan", shows: 
Between 2010/11 and 2012/13 the total number of "Administration and central services" staff rose by 5%. Teaching and teaching support staff together fell by 8%.

2) Health & Social Care Information Centre report shows:
Between 2009 and 2013 the number of GPs remained about constant. However, "Admin & Clerical" rose by about 20%.

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 4th December)

Autumn Statement: George Osborne to shrink the State to its smallest since the 1930s

The Chancellor's spending plans mean the public spending relative to the whole economy would be the smallest in 80 years, the Office for Budget Responsibility (OBR) said. The OBR, the independent government forecaster, said that Mr Osborne's tax and spending policies will require an austerity programme in the next Parliament much bigger that the one implemented by the current Government. That will mean far-reaching new reductions in "day-to-day" public services, including those provided by local councils, the forecasters said. It calculated that between 2009-10 and 2019-20, spending on public services and central government will fall from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts will be delivered during this Parliament, with around 60 per cent to come during the next, the OBR estimated. With major items of spending like the NHS and the state pension protected from cuts by political promises, independent economists say that the scale of the cuts that would be required in unprotected areas would be unprecedented and potentially leave the State unable to deliver some of its current services. The budget for Whitehall departments, not including health and education, would fall from £188 billion at the start of this decade to £86 billion in 2020, the OBR suggested. If Mr Osborne's plans are realised, public spending in 2019/20 will be 35.2 per cent of gross domestic product. It currently stands at 40.5 per cent. The lowest level achieved by Margaret Thatcher's governments was 37.3 per cent in 1988/89. The current post-war low was set in 1957/58 towards the end of an economic boom that led Harold Macmillan to declare that "most of our people have never had it so good." Mr Osborne has suggested that the Conservatives would try to find many of the post-election cuts from the welfare budget. He also promised to find £10 billion of savings in public sector “efficiency.” He gave few details of how the £10 billion will be found, but signalled it would mean at least another two years of pressure on public sector wages. Matthew Whittaker, an economist at the Resolution Foundation, said that none of the parties has been candid with the electorate about “just how much more fiscal pain there may be to come after the election.” TELEGRAPH

Successful publicly owned East Coast Mainline gets the chop: Stagecoach and Virgin joint-venture wins franchise

Unions have condemned the reprivatisation of the service, which has performed well in public hands over the last five years, recording strong customer satisfaction scores while returning all profit to the Treasury – making payments of £1bn in total. The state-owned company, Directly Operated Railways (DOR), stepped in to rescue the London-to-Edinburgh route from National Express in 2009, because it could not deliver the payments it had promised in its contract. The arms-length operator paid £225m to the government in the last financial year. The transport secretary, Patrick McLoughlin, said DOR could not bid, because having the company owned by the Department for Transport running the line was always a “stop-gap measure”. But critics point out that about three-quarters of Britain’s railways are run in full or part by subsidiaries of foreign, state-owned rail firms, including Deutsche Bahn’s Arriva, the Dutch-owned Abellio and Keolis, 70%-owned by SNCF. The government is also preparing to sell its stake in Eurostar, almost certainly to SNCF, the majority owner. GUARDIAN

Lloyds promises to ditch sales targets in bid to snuff out mis-selling and overhaul the bank's tarnished image

Head of Retail, Alison Brittain, described it as a ‘step change’ for the state-backed lender, which has racked up an £11.3bn bill for mis-selling payment protection insurance and was fined £28m last December for its high pressure sales culture. Lloyds were notorious for giving its most prolific salesmen bottles of champagne and ‘grand in the hand’ bonuses. Describing ditching sales targets as an ‘overwhelming symbol of a different way of thinking and running a business’, she said: ‘We’ve managed all the risk out. We knew we were running a clean bank, but this last symbolic gesture says to everybody who works all the way through the line that it’s just about the quality of the conversation you have with the customer, not about sales.’ But the new regime will still open up Lloyds to criticism as it will impose strict targets on salesmen to meet a certain number of customers. A senior personal banking adviser, who asked not to be named, said: ‘The directors always paint a false picture to cover their own backs. Any person knows the sales culture at Lloyds is appalling. Earlier this year the bank increased sales targets and last year the FCA fined Lloyds for mis-selling protection policies.’ The High Street giant said that it will introduce its ‘radical’ new regime at 2,249 Lloyds, Halifax and Bank of Scotland branches from January 1. DAILY MAIL

£50m tuition fees loan scam? Thousands of ‘fake’ students discovered at new private higher education colleges

The report by the National Audit Office (NAO) was prompted by a Guardian investigation into the sector which found that lecturers were teaching to empty or near-empty classrooms. Students and staff alleged that bogus students who were barely literate were using colleges as a “cash point” to access taxpayer-subsidised loans they believed they would never pay back. The new breed of private higher education colleges can charge students £6,000 a year in fees. For two of the largest of these new institutions – London School of Business and Finance, and London School of Science and Technology – the dropout rate rose to about five times the average. By comparing data on those claiming student fees with those registered with exam board Pearson/Edexcel, the spending watchdog identified 2,963 students – 20% of the total studying HNDs – who accessed student funding in 2012-13 without ever being registered to sit exams. This figure excluded students who dropped out that year. In total those students could therefore have accessed over £50m. The auditor found that another group of 5,500 undergraduates from the EU have been unable to prove they were either living in the UK or entitled to public funding. A separate internal government inquiry found that 1,000 of these students, most of whom come from Bulgaria and Romania, were definitely fraudulent and had already claimed £5.4m in student loans before being found out. The government has been able to recover just 7% of that money so far, the NAO said. GUARDIAN

Read More