Rip-off News round-up. Our pick of the last week's media (Thu 25th June)

Boris Johnson attacks firms that use tax credits to keep pay down

The Mayor of London, Boris Johnson, has warned David Cameron against “hacking back” on benefits for low-paid workers until companies “cough up” more money and increase their pay. He condemned private firms that fail to pay the living wage and force their staff to rely on tax credits to top up their pay were “scandalous”. Mr Johnson said: “It is scandalous that we have gigantic supermarkets that are being subsidised to the tune of hundreds of millions of pounds with in-work benefits whilst they have huge dividends, bonuses and private jets.” His intervention came after the Prime Minister used a speech earlier this week to attack the rising cost of tax credits and accuse firms of using the benefits system to hold down wages. Mr Cameron and George Osborne, the Chancellor, are committed to finding £12  billion worth of savings in the welfare budget, with tax credits likely to be cut. It was yesterday claimed that the cuts are proving so controversial that the Government has yet to decide where they will fall, and may delay setting them out until the Autumn Statement. TELEGRAPH

UK to reject EU plans to combat multinational tax avoidance

David Gauke, financial secretary to the Treasury, told representatives from the European parliament that Britain would not adopt the measures to introduce certain common tax rules. “He was very clear that the UK is insisting on tax competition,” said German MEP Michael Theurer, who met with the UK treasury minister on Thursday. “It was really a shock from the minister.” Theurer is part of a committee of MEPs set up to examine how multinationals are avoiding tax in the EU and what can be done about it. The committee was set up in response to the LuxLeaks revelations of tax avoidance in Luxembourg and its members strongly support the reform plans announced on Wednesday by European commissioner for tax Pierre Moscovici. Moscovici’s proposals seek to resurrect a longstanding tax harmonisation policy, which has been blocked by hostile member states since 2011. Known as the common consolidated corporate tax base, or CCCTB, the policy would see countries adopt a common set of rules on where company profits arise – removing many of the national differences that multinationals have been able to exploit to lower their tax bill. GUARDIAN

Tories move to scrap child poverty target amid fears their policies will raise child poverty

The Child Poverty Act, introduced by Labour, legally commits the Government to reducing child poverty to fewer than one in ten children by 2020. But the Daily Mail newspaper reports that the Government wants to repeal the legally binding target, possibly as early as next month. David Cameron has also hinted that that the way child poverty is measured could be changed, ahead of an expected rise in the current metric. The Institute for Fiscal Studies forecasts that child poverty is set to rise of the first time in a decade. Around 17.4 per cent children were in poverty in the UK, a figure that has been steadily falling or stable, until now. The Children’s Society said at the launch of the Government’s welfare cap that it would hit 140,000 children compared to only 60,000 adults. The Government has now pledged to reduce the cap even further from £26,000 to £23,000. INDEPENDENT

Skilled workers 'may vanish' if further education budget cuts continue

Professor Alison Wolf, a respected labour market expert and author of the Wolf review of vocational education, said the further education sector that provides the bulk of the UK’s post-secondary training faces possible collapse and the loss of a valuable source of technicians and mechanics. Hardest hit are likely to be small companies in manufacturing areas such as the west Midlands, which will be unable to compete with larger companies that can fund their own in-house training.  Professor Wolf said: “It damages and affects the nature of the industrial structure of this country. If you create a system in which vocational training can’t be funded, that is going to have a knock-on effect on which parts of the economy flourish and which don’t.” Wolf said that the FE sector would be squeezed by the expansion of universities, which will soon be allowed to recruit unlimited numbers of undergraduates but were unlikely to train the skilled technicians the economy demands. “If you are a 19-year-old and the choice is between a declining number of places in struggling institutions being funded a little over £2,000 a year, or open doors at another institution with uncapped ability to recruit where the government is underwriting fees of £9,000 a year, where are you going to go?” she said. GUARDIAN

UK rents 'most expensive in Europe' while our homeowners get cheap mortgages

Tenants typically spend 39.1% of their income on rent compared with a European average of 28%, figures from the National Housing Federation suggest. Renters in Holland and Germany, for example, had private rents that were about 50% cheaper than in the UK. Private tenants made up about 17% of all UK residents. The NHF added that tenants were facing high costs, while our homeowners are benefitting from competition between mortgage lenders. Low interest rates, a trend of owners sticking with long-term tracker deals, and a lack of properties on the market are all contributing to lenders lowering the cost of home loans to try to tempt owners to their mortgage products. The contrasting fortunes of renters and owners will be a concern for those who see little prospect of getting on the housing ladder in the short term. There is also a culture of longer-term residency in properties on the continent, unlike in the UK where people moved more often owing to short and insecure tenancy agreements, the federation added. BBC NEWS

Thousands attend anti-austerity rallies across UK

The biggest march was in London, where thousands of people attended a rally outside the Bank of England before marching to the Houses of Parliament. Union leaders and celebrities including Russell Brand and Charlotte Church have addressed crowds, while protests also took place in Liverpool and Glasgow. The London rally was also addressed by Northern Ireland's Deputy First Minister Martin McGuinness, former Coronation Street actress Julie Hesmondhalgh and Labour leadership hopeful Jeremy Corbyn. The protest was organised by protest group the People's Assembly, which said 250,000 people attended. The Met Police have not estimated how many people were there. Thousands of people also attended the rally in Glasgow, organised by Scotland United Against Austerity. BBC NEWS

The great insurance swindle: Motorists hit by £1billion rip-off as firms hide huge rises in premiums

Millions automatically renew their policies with the same firm, unaware of hidden price rises. Britain’s biggest insurers are keeping them in the dark by refusing to show them what they paid in the previous year. Instead, they send letters reassuring customers they have found the best quote for them. Consumer groups accused insurers of treating motorists like ‘suckers’ and said they had a moral responsibility to halt the practice. A fifth of Britain’s 29.6million motorists let their insurer automatically roll over their policy in the last 12 months – meaning they are being fleeced out of as much as £1.3billion. Add the annual cost of automatically renewing breakdown cover and buildings and contents insurance, and the rip-off could run into hundreds of millions more. Drivers can save up to £213 by seeking a cheaper deal, research for the Daily Mail shows. The over-55s are hit hardest as they tend to be the most trusting. In some cases, the children of older customers have come to their rescue after spotting £1,000 bills for car cover. The Mail and consumer groups have called for previous quotes to be included on renewal letters. But instead, insurers send letters full of reassuring language such as ‘Happy anniversary!’ and ‘Relax, you don’t need to do a thing’ in an attempt to prevent them going elsewhere for a cheaper deal. The risk of being ripped off has rocketed since 2011, when a law was introduced that forced insurers to automatically renew car cover unless the customer cancelled it. This was designed to curb ballooning payouts to victims of uninsured motorists which were pushing up premiums for all drivers. DAILY MAIL

The real victims of the supermarket price war! Seven out of ten suppliers feel mis-treated by Britain's big grocers

As many as 70 per cent of suppliers to the UK's biggest supermarkets have faced issues including late payments, high charges for packaging and disputes over payment, according to a new poll. Yet despite the high level of disputes and reported poor treatment, almost one in five suppliers would choose not to raise any issues with the adjudicator, mainly because they fear retribution. The Groceries Code Adjudicator carried out a poll of 1,000 suppliers to find out how they are being treated and whether there had been any improvement since the watchdog was set up two years ago. Of the suppliers surveyed, 35 per cent said that Iceland rarely or never complied with the code, 32 per cent said they same of Tesco, 32 per cent of Morrisons, 22 per cent of the Co-op, 16 per cent of Asda, 15 per cent of Lidl, 12 per cent of M&S and Sainsbury's, 11 per cent of Waitrose and five per cent of Aldi - although none said that Aldi never complied. The watchdog was set up to oversee the Groceries Code of Practice, which was introduced by the Office of Fair Trading. It applies to the ten largest grocers, which all have sales of more than £1 billion. DAILY MAIL

GSK and Unilever among 17 companies fined £126m for fixing prices in Belgium

Some of Britain’s biggest firms – including consumer goods giant Unilever and drugs major GlaxoSmithKline – are among 17 companies fined a total of £126million for fixing prices in Belgium. A mix of supermarkets and manufacturers were found guilty of fixing the prices of personal care products such as deodorants and soaps between 2002 and 2007. Nurofen maker Reckitt Benckiser, L’Oreal and Carrefour were also involved in what is thought to be one of the first times grocers have been penalised by Belgium’s competition authority for colluding with manufacturers. It was alleged that supermarkets contacted suppliers ahead of increasing prices to check that rival grocers were also raising theirs by a similar amount. In 2006, Colgate-Palmolive acted as whistleblower and was granted immunity from fines. Subsequently, GSK and Reckitt Benckiser (Belgium) also applied for leniency and were granted a reduction of penalties. The fine comes less than six months after Unilever was fined for fixing prices in France. The French competition regulator issued its biggest-ever fines, totalling £748million, to more than ten firms following an investigation into the rigging of two product areas between 2003 and 2006. In 2011, Unilever was also fined £81million for colluding over washing powder prices in eight countries, according to the European Commission. DAILY MAIL