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Thursday, 12 March 2015

Thursday, March 12, 2015 Posted by Hari No comments Labels:
Posted by Hari on Thursday, March 12, 2015 with No comments | Labels:

The rich are 64% richer than before the recession, while the poor are 57% poorer
The gap between richest and poorest has dramatically widened in the past decade as wealthy households paid off their debts and piled up savings following the financial crisis, a report by the Social Market Foundation (SMF) warns. By contrast, the worst-off families are far less financially secure than before the recession triggered by the near- collapse of several major banks. They have an average of less than a week’s pay set aside and are more often in the red. Younger workers have fallen behind older people while homeowners – particularly those who have paid off their mortgages – have become increasingly affluent compared with their neighbours who are paying rent. The SMF’s findings will be seized on by Labour as evidence that any recovery from the downturn is uneven and not shared across all income groups. However, the trends uncovered by the SMF began before the Coalition came to power, underlining the huge impact of the credit crunch on levels of affluence. INDEPENDENT

Privately run Work Programme benefit cuts are a "post code lottery"
The homeless charity Crisis said there is a "post code lottery" of sanctions - when claimants have their payments stopped. The charity provided evidence that there was no correlation between the high sanction rates and bad behaviour by claimants. However Crisis did say that different policies by private sector companies delivering the Work Programme for the long-term unemployed might be a factor. It said sanctions rates varied between 15.4 per hundred claimants per month in Richmondshire, North Yorkshire, and 1.8 per hundred in the Western Isles. Since April 2000, more than six million people have had benefits payments stopped, usually for failing to keep appointments, or demonstrating that they are otherwise not available for work. The rules were tightened in October 2012, following the Welfare Reform Act. Payments can be stopped for four weeks, or as much as three years, depending on how many times the rules are broken. The government has always argued that benefit sanctions act as an incentive to help people find work. BBC NEWS

Rise in Councils using aggressive enforcement and bailiffs to recover debts
Enforcement action “appears to be the norm, not a last resort”, said the debt charity StepChange, after a survey of its clients found that even after speaking to their council about their debts, 62% had been threatened with court action and 51% had been threatened with bailiffs. In contrast, only 25% were offered an affordable payment option and just 13% were encouraged to get debt advice. The charity said it had seen a huge increase in the number of people seeking its help with council tax debt, and the growth was outstripped only by the growth in problems caused by payday loans. StepChange said that in 2010, 13,353 people who contacted it were in arrears to their council, but in 2014 this figure had risen to 63,016 – an increase of 372%. Over the same period the average amount owed rose from £675 in 2010 to £832. Of StepChange’s clients, 28.3% had council tax debt in 2014, compared with 10.4% in 2010. Changes to council tax benefit benefits, the rising cost of living and the tough stance taken by councils were likely to be driving the increase in the number of people seeking help. Mike O’Connor, chief executive of StepChange, said: “It is shocking that many councils are less likely to be helpful to people in debt than banks are, and are more likely to take people to court... Councils need to pursue debts but they must have a responsible and proportionate approach to dealing with people in arrears and not default to aggressive enforcement that often only serves to deepen debt problems.” StepChange said councils were under pressure to collect tax, and were named and shamed based on these rates, but a fall in collection rates in 2013-14 suggested tough enforcement action was not working. It calls for changes to the Council Tax (Administration and Enforcement) Regulations 1992 to force councils to provide evidence that they have tried to pursue an affordable repayment plan, and for consumers to get protection against enforcement of unaffordable repayments if they are seeking help with their debts. GUARDIAN

Barclays board member told to resign over pay awards by UK's largest investor body
A City grandee in charge of handing out bonuses to Barclays directors has been told to step down immediately by one of the UK’s largest investor bodies. The call for the immediate departure of Sir John Sunderland, who is chairman of the Barclays’ remuneration committee, is being made by the Local Authority Pension Fund Forum (LAPFF) – which unites 64 public sector pension funds with combined assets of £150bn. Kieran Quinn, chair of LAPPF, said: “Sir John Sunderland must go from the Barclays board immediately. It is inexplicable how Barclays can have gone back on its promise to the 2014 AGM that Sir John would step down. Having messed up remuneration for 2013, Sir John has in fact stayed on as chair and presided over another year of still unacceptably high pay for 2014, and is still in place in March 2015. It’s nothing short of misleading shareholders.” Last week, Antony Jenkins, the chief executive of Barclays, was forced to defend his £5.5m pay packet as the bank set aside £1.25bn in preparation for a wave of fines and penalties for rigging foreign exchange markets. GUARDIAN

Ticket re-selling websites forced to declare original ticket price, and hidden fees
Four secondary ticket-selling websites, Stubhub, Seatwave, Viagogo and Get Me In, have agreed to be more transparent, following pressure from the Competition and Markets Authority (CMA). The sites re-sell tickets to music, theatre or sporting events which have previously been bought by somebody else. They have been criticised for charging high prices, and not always showing the original cost of the tickets. But the sites have now promised to give consumers clearer information. As a result consumers will be able to see: The original cost of any ticket; Whether there are entry restrictions and restricted views; Whether multiple bookings refer to seats that are next to each other; What additional charges are involved; A contact email address if things go wrong. Some high profile artists, including the Arctic Monkeys, Iron Maiden and the management of One Direction, had called for even tighter rules. They, and many sporting bodies too, had wanted consumers to be given the names of the original ticket-buyers. BBC NEWS

Two million do not have a bank account, costing them an extra £1,300 a year
Those excluded from a bank account face extra costs of £1,300 a year and less choice of goods and services, the Financial Inclusion Commission found. About two-thirds of those currently without accounts had one in the past. But many of those had run into debt problems or had a bad experience with a bank and their accounts were closed. The commission has recommended that a financial health minister be appointed. It said that fewer than half of British households were saving. Some 13 million people in the UK did not have enough savings to support them for a month if they had a 25% cut in income, it added. High-cost borrowing and the use of illegal money lenders had grown, the commission found. Sir Sherard Cowper-Coles, chairman of the commission, said: "Our vision is for everyone to enjoy decent financial health in the UK... That means every adult is connected to the banking system, has access to affordable credit, is encouraged to save, has the right insurance at the right price, and access to objective financial services advice." BBC NEWS

Giants must 'pay a fair share' of tax: Small firms urge Chancellor to use Budget to ensure larger companies pay their dues
Phil Orford, chief executive of the Forum of Private Business (FPB), said: ‘With austerity remaining a key priority for the Coalition, we feel that the Chancellor needs to be able to use taxation as a way to influence better business practice in the UK, ensuring that all businesses pay their fair dues and that the system doesn’t unfairly target many of the small to medium-sized firms that form the backbone of the UK economy.’ The FPB  also want to see action to cut red tape and are urging that increases in the minimum wage should be limited to affordable levels. DAILY MAIL

Bank “swap” mis-selling: Small firms 'treated unfairly' and excluded by compensation scheme
A "significant number" of firms mis-sold financial products by banks have been "treated unfairly" by a compensation scheme, MPs have reported. The Treasury Committee has urged the Financial Conduct Authority (FCA) to demonstrate that the scheme has not "unduly favoured the banks". The MPs also called on the FCA to explain why it had introduced a £10m cap on the value of the interest rate hedging products considered eligible for inclusion in the scheme. It said this decision meant a third of firms were excluded from participating, and questioned whether this was "a concession to bank lobbying". Committee chairman Andrew Tyrie said: "A significant number of those firms who were mis-sold these hedging products feel that, having been ripped off in the first place, they have now been treated unfairly again." The mis-selling arose when banks insisted that small firms applying for loans had to take out insurance against a rise in interest rates, often making repayments unmanageable. That insurance took the shape of so-called "swap" contracts, also known as interest rate hedging products, which would usually pay out if rates rose by more than one or two percentage points. What the bankers did not tell the businesses was that the "swap" contracts also worked in reverse. If interest rates fell, it would be the business, not the bank, that paid out potentially huge sums. In other words, the businesses were effectively insuring the bank against interest rate falls. When rates hit rock bottom in March 2009, instead of benefiting from cheaper repayments, the businesses found themselves coughing up hundreds or thousands of pounds extra in premiums for the swap contracts. In 2013, the then regulator - the Financial Services Authority (FSA), now the FCA - found that more than 90% of these swap contracts had been mis-sold. It subsequently agreed the terms of a compensation scheme with nine banks, including Royal Bank of Scotland, Lloyds Banking Group, Barclays and HSBC. BBC NEWS

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