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

MPs hiring even more relatives: Annual bill soars by 50% in four years to almost £3.8million

New figures show the bill for family members on the public payroll has soared by 50 per cent since the general election to hit almost £3.8million. Several Cabinet ministers are among almost 170 MPs who declare that they have a relative on their staff, with their wages funded by the taxpayer. When the new expenses regime was introduced in 2010, MPs were allowed to hire one relative, with the details declared on a register. The Independent Parliamentary Standards Authority, which is now responsible for policing MPs' claims, has revealed that in 2010 there were 137 MPs employing family members but the figure soared to 167 last year. The total pay bill has rocketed from £2.4million in 2010-11 to almost £3.8million in 2013-14. It means that the average salary paid to family members has risen by a third, from just over £17,101 to just over £22,400. Ipsa does not publish exact pay details, but gives salary bands in £5,000. Records show two Tory MPs pay their wives the most. Peter Bone's wife Jeannette receives between £45,000 and £49,999 a year for working as her husband's office manager. Christopher Chope's wife Christine is in in the same salary bracket. Labour frontbencher Hilary Benn pays his wife Sally up to £24,999. Shadow energy secretary Caroline Flint pays her husband Phil Cole as her senior parliamentary assistant on up to £39,999. Shadow transport secretary Michael Dugher's wife Joanna earns up to £34,999 after moving up three pay bands when she became his office manager. Ipsa said: 'We have introduced a number of restrictions and safeguards to regulate MPs employing family members or other connected parties. 'And, crucially, we think the public should know about these arrangements — which is why we publish all the details including the name, job title and salary range of all connected parties employed by MPs.' DAILY MAIL

OECD report: growing inequality since 1980s cut UK growth by 20%

The OECD, the west’s leading economic thinktank has dismissed the concept of trickle-down economics. Publishing its first clear evidence of the strong link between inequality and growth, the Paris-based Organisation for Economic Cooperation and Development proposed higher taxes on the rich and policies aimed at improving the lot of the bottom 40% of the population. Trickle-down economics was a central policy for Margaret Thatcher and Ronald Reagan in the 1980s, with the Conservatives in the UK and the Republicans in the US confident that all groups would benefit from policies designed to weaken trade unions and encourage wealth creation. The OECD said that the richest 10% of the population now earned 9.5 times the income of the poorest 10%, up from seven times in the 1980s. However, the result had been slower, not faster, growth. The authors added: “It is not just poverty (ie the incomes of the lowest 10% of the population) that inhibits growth … policymakers need to be concerned about the bottom 40% more generally – including the vulnerable lower-middle classes at risk of failing to benefit from the recovery and future growth. Anti-poverty programmes will not be enough.” It concluded that “income inequality has a sizeable and statistically negative impact on growth, and that redistributive policies achieving greater equality in disposable income has no adverse growth consequences.” Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand, nearly nine points in the UK, Finland and Norway, and between six and seven points in the United States, Italy and Sweden. GUARDIAN

Food banks: Archbishop of Canterbury Justin Welby urges politicians to face up to Britain's hunger

The Archbishop of Canterbury, Justin Welby, launched a report into the “new phenomenon” that families are driven to relying on food banks because of failures in the welfare system. Many families are so desperate to avoid being evicted for rent arrears, or having their gas or electricity cut off that “they go without food and therefore see food banks as reintroducing that buffer in their finances which many have lost,” the report’s authors warn. They call for government backing to set up a new network called Feeding Britain, to co-ordinate the work of food banks and other voluntary organisations and charities – which currently receive just 2 per cent of the 4.3 million tonnes of waste food generated by the food industry every year. The report, Feeding Britain, by the All-Party Parliamentary Inquiry into Hunger in the UK, is careful to avoid party politics, and so does not mention cuts to the welfare system introduced by the present Government, such as the “bedroom tax” – but it is scathing about the alleged inefficiency of the Department for Work and Pensions. MP Frank Field said: “The most worrying aspect is the sheer inability of the department to deliver benefits efficiently and accurately. Some families wait… 13 weeks for their benefits to be processed, and this is a benefit where people are eligible because they have got no other income.” The inquiry team also criticises the way sanctions are imposed for some claimants who unintentionally fail to follow the rules. While it acknowledges there are people who cheat the system, others have been punished because they did not understand the rules, or for trivial reasons – including one man sanctioned for writing on the wrong side of a form. INDEPENDENT

Whitewash: rip-off pension providers will not be named and shamed

The results of an 18-month review by the UK’s competition watchdog into rip-off pension charges will not name and shame the worst offenders, leaving consumers in the dark about whether their scheme provides value for money. The Competition and Markets Authority (CMA) set up an ‘independent project board’ (IPB) to review pension charges following a report from its predecessor the Office of Fair Trading that revealed £30 billion of savings in pre-2001 defined contribution (DC) workplace pensions may be at risk of high charges and failing to provide value for money. The report goes against the general push towards greater transparency and lower charges in pensions. From April a 0.75% cap will be placed on pension charges so that those being auto-enrolled into a pension scheme will not have to pay extortionate charges. The cap will mean a saver with a pension pot of £30,000 will pay £225 a year for their pension scheme, compared to the £450 they would pay on a scheme that charges 1.5% - previously a typical levy for a pension. Campaign group ShareAction said the review appeared to be 'a stitch-up for savers'. ‘As we always predicted, this so-called inquiry looks like an effort to protect insurers who have exploited innocent savers over a long period, gouging out fees on more than £30 billion in poor-value schemes,' said Catherine Howarth, ShareAction chief executive. ‘This inquiry has no plan for further review or action and we fear it will simply be kicked into the long grass. But the fate of this inquiry deserves scrutiny from parliamentarians, and we will be speaking with MPs over the coming days to ensure that questions are raised in parliament. CITYWIRE