Rip-off News round-up. Our pick of the last week's media (Thu 23rd July)

Osborne ousts regulator boss who imposed record fines on the banks

Chancellor of the Exchequer George Osborne ousted the U.K. finance industry’s top watchdog a month after saying the era of “ever-larger” fines for bank misconduct was over. Under Martin Wheatley, the Financial Conduct Authority (FCA) issued a record 1.47 billion pounds in fines last year. In a speech last month, Osborne said that “simply ratcheting up ever-larger fines that just penalize shareholders, erode capital reserves and diminish the lending potential of the economy is not, in the end, a long-term answer.” The government is keen to harness the financial system to drive growth. Wheatley has transformed the FCA’s reputation during his tenure from a light-touch regulator to a tough enforcer. The agency has taken action against banks over multiple scandals including interest-rate and currency benchmark manipulation. Last year, five banks were sanctioned more than 1 billion pounds for foreign-exchange rate manipulation. Labour MP John Mann said Osborne’s move has the effect of “rewarding wrongdoing in the financial services industry as it undermines the regulator.” BLOOMBERG

HS2 chief hits out at ‘unjust’ division of rail assets between north and south

High-speed rail project’s chairman Sir David Higgins says north of England is often shortchanged and given ‘crappy’ hand-me-down trains. “I believe the north has been shortchanged. I look at expenditure per head, the pass-me-down process – the offcuts from rolling stock always end up in the north. Two hours from Birmingham to Leeds on a chugger, old crappy trains on poor railway lines. We would not accept that from London to Swindon, and we don’t: we insist on a huge amount of money going into commuter services,” he said. Events of recent weeks have made many dubious that things will soon change. The chancellor’s northern powerhouse was dubbed the northern powercut after the government announced that rail upgrades, including the electrification of the Midland mainline and the Transpennine railway, were to be “paused”, citing cost overruns at Network Rail – despite manifesto pledges made just weeks earlier. But Higgins insists that HS2 will attempt to address this divide, with a first leg that runs from London to Birmingham, then a second phase linking to Manchester and Leeds. Despite the criticism, Higgins compared Britain’s attitude towards rebuilding its railways favourably to his native Australia and elsewhere. He added: “It’s really encouraging that this country has the courage to face up to these issues. I look at some of the infrastructure issues in America and think, good God.” GUARDIAN

Student debt to rise: poorest graduates 'will owe £53,000' after grants cut

Students from the poorest backgrounds in England will graduate owing up to £53,000 after maintenance grants are replaced by loans, says the Institute for Fiscal Studies (IFS). Changes to student finance announced in the Budget will mean an initial £2bn annual saving for the government. But the IFS estimates only a quarter of these loans will be repaid and the long-term annual saving will only be £270m. More than half a million students from poorer backgrounds currently receive a maintenance grant, at a cost to the taxpayer of about £1.57bn a year. From 2016, these will be replaced with loans, which they will be expected to repay in addition to loans for their tuition fees. The IFS says the new loans will mean up to £550 more "cash in pocket" per year for those students, but they will graduate owing up to £53,000 in total, compared with £40,500 before maintenance grants were scrapped. A Department of Business, Innovation and Skills spokesman said the extra £550 helped those from poor backgrounds: "The changes announced in the Budget provide students with more money in their pockets to help with living costs while studying... "Lifting the cap on student numbers also means that more people will be able to benefit from higher education than ever before." BBC NEWS

Ikea adopts the living wage for UK staff in 'massive breakthrough'

The announcement that the home furnishing retailer will pay its staff a minimum of £9.15 an hour in London and £7.85 across the rest of the UK from April next year was described as a “massive breakthrough” by the living wage campaign. It will mean a pay rise for more than 4,500 staff. In recent weeks, pressure groups and individuals have been turning up at the annual shareholder meetings of retailers such as Tesco, Next and Ocado to demand better pay for workers. The foundation has accredited more than 1,600 businesses, including nearly a quarter of the FTSE 100 and well-known companies such as Nestle, Nationwide and British Gas – but until now, the only household name retailer that had signed up was Burberry. Ikea’s move comes less than a fortnight after George Osborne used his post-election budget to announce that the £6.50-an-hour minimum wage would be recast as the “national living wage” and rise next April to £7.20 for people aged over 25, with further increases to “over £9” by 2020. Last month, Tesco boss Dave Lewis told campaigners that the retailer was in detailed talks with the trade union Usdaw about restructuring pay packages to increase basic salary. GUARDIAN

Benefit cuts to hit huge number of children, government figures show

More than 330,000 children from low-income families in Great Britain will be hit by Conservative plans to reduce the benefit cap, the government’s own impact assessment has concluded. The government wants to cut the cap on benefits payments of £26,000 a year per household to £23,000 in London and £20,000 in the rest of the country. The policy will take an estimated £300m out of the pockets of the affected families in its proposed first full year of operation in 2017-18, costing those who are hit an average of £63 per household each week. The impact assessment also notes that single mothers will be hit hardest as a group by the cap – constituting 59% of those affected by the change; more than three-quarters of the households affected will be aged between 25 and 44; as many as 37% of those affected may be ethnic minority households – although the study says this cannot be precisely quantified. The housing charity Shelter said the plans to reduce the limits to £20,000 (£385 a week), or £23,000 (£442) in London, would mean that large parts of the south-east and south-west, and some northern cities, would now be unaffordable for many more families when it is introduced next April. Whereas previously the most expensive London postcodes, such as Chelsea and Islington, were affected, in the near future areas such as Portsmouth and Luton would be out of reach for unemployed families who are reliant on housing benefit. In March, the supreme court ruled that the £26,000 cap was in breach of the UK’s international obligations on children’s rights. GUARDIAN

Limiting skilled migrants just because they are easier to stop than illegals is a big mistake, says CBI chief

David Cameron is risking the economic recovery by refusing to lift the cap on skilled foreign workers coming to the UK, the CBI has said. The monthly limit on visas was hit for the first time since it was introduced, in June and already again this month. Up to 20 firms have complained that they are unable to get the staff they need into the country. CBI director general John Cridland said the 20,700 annual limit on Tier 2 business visas, introduced in 2011, was fine for when the country was in recession but was too tight for a growing economy. Mr Cridland is concerned the government means to further tighten the limit despite skills shortages in sectors such as professional services, IT, science and engineering. He said the government should focus its immigration efforts on tackling bogus asylum-seekers, over-stayers, criminals, welfare-seekers and some unskilled workers. Instead, skilled migrants seemed to have become "the first port of call" because they were easier to target, he suggested. BBC NEWS

Supermarket price war 'hitting food supply firms'

The number of suppliers in significant financial distress has risen 54% since last year, according to insolvency specialists Begbies Traynor. In the second quarter this year, 1,622 food suppliers were struggling to make ends meet, up from 1,052 at the same period last year. Of those, 89% were small suppliers, showing that small firms are bearing the brunt of supermarkets' efforts to try to regain customers from discounters. Part of the pressure on food makers comes from supply agreements with big buyers, which can involve large discounts, demands for rebates, and slow payments. Some supermarkets still take more than a month longer than agreed to settle debts with suppliers. Begbies Traynor said: "Unfortunately the retail environment is set to become even bleaker for the UK's small food suppliers who are facing the harsh reality that price slashing is not just a short term pain but something that's here to stay." BBC NEWS