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...

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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

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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. 

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

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

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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

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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

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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

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

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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."  

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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%.

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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

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Is it time to stop bashing bankers? Continuing revelations of "cringeworthy behaviour" suggest not.

Is it time to stop bashing bankers? Have the crooks already been biffed out of the ring? Are we just hindering the new saintly bankers? As they clean up after the few bad apples who spoiled it for everyone else?
Of course not. And in saying this we are in good company:

Even the Governor of the Bank of England no longer believes in the "few bad apples" theory of rotten bankers. In November 2014 the Governor, Mark Carney, said:

"The succession of [banking] scandals means it is simply untenable now to argue that the problem is one of a few bad apples. The issue is with the barrels in which they are stored."

The Bank of England tweeted Carney's sentiments to its 120,000 or so Twitter followers to make sure as many as possible heard. Here it is, so you can retweet it too:

#FinancialStabilityBoard’s Carney says untenable to argue that problem is a few bad apples. It is the barrels in which they are stored
— Bank of England (@bankofengland) November 17, 2014

The Treasury minister responsible for the City of London said in July 2014:

"I think there's quite a long way to go to really change the culture.... I think we are still going to see a lot of cringeworthy announcements."

A report on "The Culture of British Retail Banking" in November 2014 by the Cass Business School and the think tank New City Agenda (founded by cross-party luminaries) stated banking suffers from:

"A toxic culture decades in the making [that] will take a generation to clean up."

This same report refers to an ethics study done in June 2013, several years after the banking crash, showing the big retails banks still swimming in a red sea of bad ethics.

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Potentially lethal food poisoning bacteria in 70% of supermarket chickens? That's not the big story...

Fee explains the real story to KJ...

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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

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Graphs at a glance: Will fracking bring cheap energy to Britain? The evidence suggest not.

There has been a lot of talk about fracking the UK. Our government is so keen it has considered changing the law on trespass to make it easier for companies to frack under our properties. 

Would it be a good thing? Even if there is absolutely no risk bits of our green and pleasant land  may disappear down multiple sinkholes?


The graph below from a parliamentary report, "The Impact of Shale Gas on Energy Markets", shows how fracking caused the price of gas to plummet in the USA. Benchmark natural gas prices in the USA (Henry Hub) and the UK (National Base Point (NBP)) were about the same until the Americans got down to some serious fracking.

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Rip-off News round-up. Our pick of the last week's media (Thu 20th November)

Tuition fees: Three quarters of students won’t be able to pay off their debt

Student debt is now so high compared to average salaries that many graduates in respectable public sector professions will be unable to repay their fees even by the end of the 30-year repayment period, the Higher Education Commission warns. This funding "black hole" is forcing the Government to indirectly subsidise higher education writing off billions of pounds in student debt - even though the point of £9,000 a year fees was to make universities less reliant on the taxpayer. The commission, an independent body set up to monitor higher education, concludes that the current university fees system offers the “"worst of both worlds" to students, universities and the Government - and warns that some institutions are now at risk of "failure". According to the Institute for Fiscal Studies, the average student debt will be £44, 015 - higher even than the US. "The Commission fundamentally questions any system that charges higher education at a rate where the average graduate will not be able to pay it back... We are deeply concerned that the Government may have created a loan repayment system where, for example, a teacher is unable to secure a mortgage at age 35 because of the high level of monthly loan repayment." INDEPENDENT

Government dismisses study linking use of food banks to benefit cuts

The study was commissioned by the Church Of England, the Trussell Trust food bank network, Oxfam and Child Poverty Action Group. The study found that cuts and changes to Britain’s increasingly threadbare social security system are the most common triggers of the acute personal financial crises that drive people to use food banks. At least half of all food bank users are referred because they are waiting for benefits to be paid, because they have had benefits stopped for alleged breaches of jobcentre rules or because they have been hit by the bedroom tax or the removal of working tax credits, it finds. The study, the most extensive research of its kind yet carried out in the UK, directly challenges the government’s repeated insistence that there is no link between its welfare reforms and the huge increases in charity food aid. There are no official statistics on the use of food banks, but the Trussell Trust, which runs more than 400 food banks in the UK, says 913,138 people were given food parcels by its volunteers in 2013-14 – almost a threefold increase on the previous year, and likely to be a fraction of the total numbers of people experiencing food insecurity. The Department for Work and Pensions (DWP) dismissed the report, claiming the research was inconclusive. But the report was welcomed by Jeremy Lefroy, the Conservative MP for Stafford, who hosted its launch at the House of Commons on Wednesday. He said it was an important study that chimed with his experience as an MP in his surgery. GUARDIAN

US fast-food workers visit UK to show us how to protest against poverty wages

The US fast-food workers who protested in New York and 100 other US cities over the “poverty wages” paid by multinational burger chains are preparing their British counterparts to launch a similar direct action campaign in the UK. Two months after the wave of US strikes and demonstrations that saw hundreds of arrests, Flavia Cabral, a McDonald’s worker from New York City who earns $8 (£5.10) an hour, said she had come to the UK to “teach workers here how to rise up and fight”. Cabral is part of a band of US fast-food workers travelling to the UK, France, Argentina, Brazil, Japan, Denmark and the Philippines as part of plans to form a global alliance of fast-food workers and organise a day of coordinated international protest in April to demand that workers get paid a living wage. “To take on global companies, the protest needs to be global. We need to take to the streets, unite together and stand up. If you ask for a raise, the management are going to say we haven’t got any money,” Cabral said at the rally. “We have to unite. We have to make it global, then it is not just you asking [for a pay rise], it is everyone around the world – and they will have to listen.” The protest plans come as McDonald’s marks 40 years since opening its first UK store in Powis Street, Woolwich, on 13 November 1974. There are now 1,249 McDonald’s outlets in the UK. The company recently announced it would hire an extra 8,000 people, mostly on zero-hours contracts – taking the UK workforce to more than 100,000 for the first time. The firm admitted last year that 90% of workers are on zero-hours contracts. McDonald’s pays under-18s a minimum starting rate of £4.35 an hour, rising to £5.15 for those aged 18-20 and £6.51 an hour for those aged 21 and over. The UK’s hourly national minimum wage rates are respectively £3.79, £5.13 and £6.50. GUARDIAN

Premier League TV rights to be probed by Ofcom

Under the current deal competition between BSkyB and BT Sport, a new entrant, pushed the overall value of its TV deals at home and overseas to a record £5.5bn over three years. It was £191m in 1992. Ofcom’s probe follows a complaint from Virgin Media, which said more matches should be available for live broadcast. Ofcom said: "Virgin Media argues that the proportion of matches made available for live television broadcast under the current Premier League rights deals - at 41% - is lower than some other leading European leagues, where more matches are available for live television broadcast." Virgin argues that by effectively limiting the supply of matches the Premier League has inflated the price that broadcasters have to pay and that cost is then passed on to consumers. Tom Mockridge, Virgin Media's chief executive, said: "The fact remains that fans in the UK pay the highest prices in Europe to watch the least amount of football on TV.” BBC NEWS GUARDIAN

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Our sky high energy and food inflation hits the poorest hardest. Our rock bottom mortgages hardly benefit them at all

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Graphs at a glance: Who's afraid of the big bad bankers? Apparently, the regulator.

According to the Guardian newspaper between 2009 and 2013 banks paid £166 billion in fines and compensation for sins ranging from LIBOR fixing, to PPI mis-selling, to money laundering, to gold price fixing, et cetera. This figure doesn't include fines from 2014 onward including FOREX fixing et cetera.

According to the Office for National Statistics £136 billion was paid in bonuses to UK staff in the financial services sector between 2004 and 2013, when much of the dodgy dealing was being done.

Fines are paid by shareholders (for Lloyds and RBS that includes us taxpayers), but bonuses are paid to individual staff. Does the UK regulator require individual naughty bankers to hand back some of the bonuses they gained doing things that earned £166 billion in fines? We hope the next graph will make this clear:

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Rip-off News round-up. Our pick of the last week's media (Thu 13th November)

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

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Graphs at a glance: Governor of the Bank of England said the housing boom is the greatest threat to the UK recovery. So what are we doing about it?

Does the UK Housing Boom really exist? It's common knowledge that London house prices have ballooned, but is the rest of the UK bubbling up too?

Figures from the Office for National Statistics show this is actually not the case. Since the banker induced economic crisis of 2008 London house prices have rocketed by 40%. UK house prices too have grown by a not insignificant 12%. However this average UK house price rise has been greatly inflated by including London's figures. 

Look at it this way: a company reviews the pay of two staff:

• Joe Minimus gets no payrise
• Felix Maximus gets a £10,000 payrise
• Their average payrise is £10,000 ÷ 2 = £5,000

The company can say it gave its staff an average £5,000 payrise. But strip out Felix's hike, and the reality is Joe got nothing.

If you strip out London house prices, as the ONS has kindly done in the graph below, you discover that in the five and a half years from January 2008 to July 2014 the average house price in the UK excluding London has risen by just 4%. That is about the same as if you put your money in a rip-off deposit account paying less than 1% for the same period of time.

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“Politically motivated” Treasury posts 24m letters, telling you what your Income Tax and NI is being spent on

Fee, KJ and Chris somehow find it in their hearts to forgive Osborne...

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Rip-off News round-up. Our pick of the last week's media (Thu 7th November)

MPs to escape expenses investigations after paperwork destroyed by Parliament

John Bercow, the Speaker, faces accusations he has presided over a fresh cover-up of MPs' expenses after tens of thousands of pieces of paperwork relating to claims made before 2010 were shredded. Members of the public who have written to Kathryn Hudson, the standards watchdog, to raise concerns about their MP’s claims have been told there can now be no investigation due to lack of evidence. Under the House of Commons' "Authorised Records Disposal Practice", which is overseen by Mr Bercow’s committee, records of MPs’ expenses claims are destroyed after three years. The move is necessary to comply with data protection laws, a Commons spokesman said. However, under that same set of guidelines, the pay, discipline and sickness records of Commons staff are kept until their 100th birthday. Health and safety records are kept for up to 40 years, while thousands of other classes of official documents on the day-to-day running of the House are stored indefinitely in the Parliamentary Archive. The shredding of the claims records means that “cold case” investigations like that into Maria Miller, the former Culture Secretary, by the expenses watchdog are now unlikely. In April Mrs Miller was forced to resign from the Cabinet and apologise to the Commons after Mrs Hudson ruled she had wrongly claimed thousands of pounds in mortgage payments between 2005 and 2009 on a home occupied by her parents. TELEGRAPH

Rail ticket 'rip-off': Self-service machines routinely denied cheapest fares to passengers

Self-service machines — which are used to purchase almost a quarter of all tickets sold annually — offer wildly different fares. Customers buying from a machine can pay more than £200 when a ticket for the same destination can be found elsewhere at the station for more than £100 cheaper. For example, at machines run by train company Northern Rail in Leeds, passengers buying a First-Class Anytime Return to Birmingham were charged £271. Only feet away, an East Coast trains machine offered the same journey using a First-Class Off-peak Return for £145.70. This type of ticket is not available for customers using Northern Rail’s machines, which means that some passengers might not be aware that they could save £125.30 by travelling off-peak. The investigation also found that many machines promote expensive fares, bury cheaper options and do not apply discounts for groups or families. Since 2004, the proportion of passenger revenue collected by machines has grown from just seven to 21 percent. Rail travel is at record levels with 1.59 billion journeys recorded in 2013-2014. In 2011, Theresa Villiers, as transport minister, condemned rail companies over how difficult ticket machines were to use and challenged the industry to clean up its act. But The Telegraph investigation examined rail fares across the country and found that customers were being offered different prices for the same journey depending on which operator’s machine they used. TELEGRAPH

NHS cuts: spending on agency nurses soars past £5.5bn

NHS spending on agency nurses and staff has spiralled to more than £5.5bn over the past four years and is continuing to rise amid a debilitating recruitment crisis in the health service. Budgets for temporary staff this financial year have already been blown apart, it can be revealed, with spending in some parts of the NHS running at twice the planned figure. Reliance on agencies – at a cost of up to £1,800 per day per nurse – comes as the number of nurse training places in England has been cut. In the last year of the Labour government, 20,829 nurse training positions were filled in England. That fell to 17,741 in 2011-12 and to 17,219 in 2012-13, rising to 18,009 in 2013-14. According to the latest figures, there were 7,000 fewer qualified nurses in August 2013 compared with May 2010, excluding health visitors, school nurses and midwives. Ministers were accused on Saturday of “truly incompetent planning” by the Royal College of Nurses. GUARDIAN

Pay rise for 60,000 workers after surge in firms signing up to living wage

More than 1,000 companies are now committed to paying the living wage or above, securing tens of millions of pounds in extra pay for the working poor. They join a host of leading companies, including Google, Barclays, Goldman Sachs, ITV and Legal & General, in making the commitment to be a living wage employer, remunerating all employees well beyond the legally enforced £6.50 national minimum wage. The surge in numbers, and the burgeoning campaign to lift the pay of the worst-off, means that about 60,000 people will be given a pay rise. The living wage rate rose this month to £9.15 in London and £7.85 elsewhere. In 2013, 432 companies were accredited by the Living Wage Foundation, a part of the community organisation Citizens UK. That figure has now more than doubled, as hundreds of other organisations, charities and businesses have signed up. The Department of Energy and Climate Change pledged on Friday that all its subcontractors would pay the living wage, becoming the first Whitehall department to be formally accredited by the foundation. In contrast, the Department for Environment, Food and Rural Affairs,  and HM Revenue and Customs (HMRC), continue to refuse to ensure that all their subcontracted staff are paid the living wage. An independent evaluation of the living wage initiative funded by Trust for London calculates that by September 2013 the living wage campaign had generated £48m in additional wages for 23,000 low-paid workers. The huge increase in accredited companies since then means those “gains have significantly increased”. The proportion of employees on less than the living wage is 22%, up from 21% last year, says the study. In real terms, that is a rise of 147,000 people to 5.28 million. GUARDIAN

Britain's bosses call on Government to stop 'ducking' big questions' and invest in 'crumbling' infrastructure

The nation’s bosses urged the Government to deliver significant improvements to everything from roads and runways to energy supply and broadband. They also called for the creation of an independent infrastructure authority to take politics out of the decision-making process. Two separate reports on the matter, by the CBI lobby group and manufacturing organisation EEF, were released amid signs that business confidence is wavering as the economic recovery slows. The CBI’s survey of 443 senior business leaders found that 67 per cent expect energy infrastructure to worsen over the next five years while 57 per cent fear the same over transport. More than 90 per cent said ‘political uncertainty’ and ‘political rhetoric’ – such as Labour leader Ed Miliband’s pledge to freeze energy prices – was damaging confidence and discouraging investment. Katja Hall, deputy director general of the CBI, said: ‘Progress on infrastructure has been a case of two steps forward and three steps back for far too long. ‘Politicians are too often seen as ducking the big, politically difficult questions looming large on businesses’ risk register, rather than grasping the nettle... Where hard decisions have been taken on issues like energy, populist political rhetoric threatens to send us backwards... We’re at a crossroads. We also need to see bold thinking and a renewal of the politics of infrastructure, finding a new way to agree upon and then consistently deliver the improvements we’ll need over the next 50 years - not just the next five.’ DAILY MAIL

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