Posted by Hari on Thursday, April 02, 2015 with No comments | Labels: Roundup

London’s poorest tenants
hit by £50m rent rise as social housing converted to 'affordable' homes
Housing associations quietly switch thousands of tenancies
to higher rates to make up a shortfall in government funding. In 2010 the
government made a 63% cut in capital investment budgets for housing
associations, in effect a £3bn reduction in available funding. The government
has also demanded that any taxpayer investment in new housing should be in
affordable rather than cheaper social rented homes. Social rents are typically half
market rate, while so-called affordable tariffs are up to 80% of private rents,
leading to complaints that the definition of affordable is Orwellian. About
11,000 homes in the capital have been converted from “social” housing to
“affordable” since 2012, and thousands more are to follow in a policy that has sparked
tenants’ rebellions. Annual rents have risen by £29m, but the total cost to
tenants over the three years to date has been £49.7m. Over half of the housing
associations set the converted rents higher than 70% of market rate in the last
recorded period. But others, determined to keep
housing genuinely affordable, have charged much lower rents. In the past year Affinity has converted 295 homes across its portfolio. It said it
had halted conversions at the estate after a protest by residents and said it
would suggest tenants consider moving only if they had surplus room. Among other associations,
in the past two years, London and Quadrant switched 1,673 tenancies earning an
extra £4.2m a year, Circle Housing switched 1,337 earning £3.8m more a year and
Notting Hill Housing Trust switched 853 earning an extra £3.3m annually. The
National Housing Federation (NHF), which represents housing associations, said
its members were being forced to convert tenancies because of George Osborne’s
deep cuts in investment budgets. GUARDIAN
Huge rise in number
of families living in temporary accommodation in England
By the end of the year 61,970 homeless households were in
temporary lodging, from B&Bs to homes rented from private landlords, of
which 46,700 were families with children. The figures, from the Department for
Communities and Local Government, had been falling, dropping to 48,190 and
35,950 respectively in the spring of 2011, but have now returned to the levels
seen in early 2009. The number of children in temporary housing increased by
almost 10,000 year-on-year to 90,450. The housing charity Shelter said the
figures were equivalent to four homeless children in every school. Rising
private rents and a chronic shortage of affordable homes have helped push the
number of families without a permanent home to the highest level in almost six
years. GUARDIAN
Anger as bosses of
two of Britain’s biggest firms walk away with annual pay packages of over
£11m each
Rakesh Kapoor, chief executive of Nurofen and Durex owner
Reckitt Benckiser (RB), took home £11.2million last year – an increase of
almost 65 per cent – despite the firm having faced a string of fines over its
corporate governance practices. And the Prudential chief executive, Tidjane
Thiam, enjoyed a 36 per cent pay rise taking his salary to £11.8million after
profits jumped 14 per cent to £3.2billion. Thiam, who will soon take the helm
at Credit Suisse, was not even the highest paid employee at the Pru. That
accolade went to Richard Woolnough, a fund manager at its investment arm
M&G, who scooped more than £15.3million despite his funds slipping to the
bottom half of the performance tables. RB’s boss’s £11.2million pales into
insignificance compared to the £91m that predecessor Bart Becht took home in
2009. While their shares have risen 20.9 per cent over the past 12 months, the
firm has suffered the acute embarrassment of being fined for questionable
practices. In January RB was fined £539,800 for breaching stock market rules
following share deals made by Kapoor and another director. The City watchdog
said the household goods giant had ‘inadequate systems and controls’ to monitor
dealing by its senior executives in its own shares. The fine came one month
after RB was fined £95million for fixing the prices of products in France. In
November it admitted its office in America had been raided by the US Attorney
in connection with more alleged anti-competitive practices. And a year ago, RB agreed
to pay the NHS £90m after it was accused of profiting from its indigestion
treatment Gaviscon after the product’s patent had expired. Earlier this month
the Institute of Directors issued a stark warning about excessive pay in the
investment industry, warning fund managers could replace investment bankers as
the target of public anger. And last night leading shareholder group Glass
Lewis recommended voting against the pay of BP boss Bob Dudley, who received a
25 per cent jump in pay and perks to £8.6million despite a drop in profits
after it was hit by the plunging oil price. DAILY MAIL
UK productivity
growth is weakest since second world war, says ONS
The Office for National Statistics said productivity
decreased by 0.2% in the third quarter of the financial year, leaving output
per hour worked little changed on the previous year and slightly lower than in
2007, before the UK’s longest and deepest modern recession. The ONS figures
show that with workers producing less than they did in 2007, Britain’s
productivity gap with its major economic rivals, such as the US, Germany and
France, has widened. The UK has the second worst productivity record of the G7
leading Western industrial nations. Weak productivity has been the flipside to
strong employment growth, since the increase in the number of people working
has not been matched by the hourly output of goods and services they have
produced. Up until the global economic crisis, the efficiency of UK workers
tended to increase by around 2-2.5% a year. Had that trend continued,
productivity would have been 15% higher than it was before the recession. An
alternative measure of productivity, output per worker, showed some growth in
2014 but only as a result of employees working longer hours. The ONS said,
despite Britain’s poor productivity, businesses were keeping their costs in
check by keeping a lid on their wage bills. GUARDIAN
Co-op Bank comes
under fire over plans to pay boss up to £4.5m - despite third consecutive
annual loss, sacking almost 1,000 staff and shutting 72 branches
The troubled lender revealed more than 50,000 of its
1.4million current account holders took their money elsewhere last year, amid
the stream of negative publicity about its finances and a drugs scandal
surrounding its former chairman Paul Flowers. But the bank still found
£3million for chief executive Niall Booker, and announced a generous pay deal
which could see him collect up to £4.5million in pay and perks this year. This
is an increase on his maximum package of £4.2million last year. Booker is
already paid more than Nationwide Building Society boss Graham Beale, who by
contrast is on course to post an annual profit of more than £1billion for its
latest financial year. The Co-op announced Booker has signed a contract to stay
in the job until at least the end of 2016. He described 2014 as a ‘year of
stabilisation’ as losses halved to £264million, compared with a £633million
loss the previous year. But this was mainly due to a sharp fall in ‘conduct’
charges, such as compensation for mis-selling payment protection insurance, and
losses from bad loans. DAILY MAIL
Tesco to reduce
number of “unfair” charges imposed on its suppliers
Tesco’s plan reveals just how important fees and charges
imposed on suppliers had become to supermarkets, often prompting them to put
products on their shelves because they generate payments from those suppliers,
rather than because shoppers might want to buy them. Tesco is radically cutting
the number of ways in which it charges suppliers from 24 to just three. The
plan was outlined by Dave Lewis, the chief executive, as the groceries watchdog
investigates Tesco over its dealings with manufacturers and distributors in the
wake of a £263m accounting scandal linked to misstatement of income from such
suppliers. Lewis said the changes had been made after talking to Tesco’s suppliers
“from sheep farming through abattoirs through food processors”. Tesco has added
thousands of lines to its range in recent years, a phenomenon that has been
blamed on supplier payments. Asda and Sainsbury’s are also trying to reduce
their reliance on this source of income so that they are freer to organise
their shelves to suit customers rather than suppliers. The new approach is part
of their battle to win back shoppers who have been turning to discounters such
as Aldi and Lidl. GUARDIAN
UK bank stress tests
to cover global economic slump
The Bank has set out the parameters of this year's stress
test, which include a collapse in economic growth in China and a sharp downturn
in the eurozone. The test imagines a sharp contraction in eurozone economic
growth and Chinese expansion of just 1.7%. China's economy expanded by 7.4% in
2014 - the slowest pace for 24 years. Economic growth of just 1.7% would plunge
Hong Kong into a deep recession that would cause house prices on the island to
collapse by 40%, hitting UK lenders such as HSBC. Bank and building societies
will also have to prove they have the capital resources to withstand a 2% fall
in economic output in the eurozone. In addition the stress tests imagine a
scenario in which the UK economy contracts by 2.3%. Barclays, HSBC, Standard
Chartered, Royal Bank of Scotland, Nationwide, Santander UK and Lloyds will be
tested this year and the results are due to be published in December. BBC NEWS
McDonald's to raise
wages for 90,000 US employees
Fast-food giant McDonald's says it will raise the pay of
more than 90,000 US employees to at least $1 above the legal minimum wage. That
is currently $7.25 (£4.90) an hour, but individual states can set their own
rates. The move will only benefit staff at company-owned outlets - about 10% of
McDonald's 14,000 US restaurants. In a statement, the firm said employees
covered by the new policy will be paid more than $10 per hour by 2016. Franchisees
who run around 90% of outlets set their own pay and benefits but this could
prompt some of these to improve their own terms. But one analyst said this could
be a way to increase revenues because McDonald's franchisees pay the company
royalties based on sales figures, which will rise as the franchisees pass the
wage costs onto their customers. "They'll try to paint this as altruistic,
but they're increasing their corporate income by doing this. It's not as nice
as it sounds," said Richard Adams, a former McDonald's franchisee who now
acts as a consultant for current ones. Fast food workers across the US have
been demanding that the minimum wage in the sector should be raised to $15 per
hour. Workers at various outlets, including McDonald's, have held strikes and
there have been street protests in many US cities. BBC NEWS
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