Thursday 2 April 2015

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

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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