Tax havens:
Super-rich 'hiding' at least $21 trillion
(£13tn)
A global super-rich elite had at least $21 trillion hidden
in secret tax havens by the end of 2010, according to a major study. The figure
is equivalent to the size of the US and Japanese economies combined. The Price
of Offshore Revisited was written by James Henry, a former chief economist at
the consultancy McKinsey, for the Tax Justice Network. The report comes amid
growing public and political concern about tax avoidance and evasion. Some
authorities, including in Germany, have even paid for information on alleged
tax evaders stolen from banks. Mr Henry said that the super-rich move money
around the globe through an "industrious bevy of professional enablers in
private banking, legal, accounting and investment industries”. He added: "From
another angle, this study is really good news. The world has just located a
huge pile of financial wealth that might be called upon to contribute to the
solution of our most pressing global problems." The three private banks
handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs. Less
than 100,000 people worldwide own about $9.8tn of the wealth held offshore. BBC NEWS
New York's $15
minimum wage would be the highest in the world
Fast-food workers in New York City will be paid a minimum
wage of $15 an hour by 2018 with the rate rolling out to the rest of the state
by 2021. The move follows more than a year of campaigning on the issue. San
Francisco, Los Angeles and Seattle have all approved a $15 minimum wage for all
employees in the three cities. Internationally, Australia comes closest with a
$12.50 base hourly wage. Major European economies such as France and Germany
(which introduced a minimum wage after the last general election) hover around
the $10 and $9 mark respectively. The rate is below $5 an hour in Greece and
Spain, which is similar to Japan ($6), and even lower in Brazil where it’s
$1.25 - though of course the cost of living varies between states and countries.
An hourly wage of $15 is of course still the exception in the US and many jobs
are exempt from the rate. The minimum wage at a federal level is $7.25. The UK
chancellor George Osborne’s recent introduction of a “national living wage”
will take the base rate to $11.15 (£7.20), rising to $13.93 (£9) by 2020. GUARDIAN
Barclays profits rise
to £3.1bn despite increasing compensation payouts for mis-selling
Profits jumped by 25% to more than £3.1billion in the first
half of 2015. The star performance was Barclays' casino banking arm, with
profits from the investment division up 36% to £1.4billion, helped by market
instability caused by the Greek debt debacle and Eurozone crisis. But the firm
set aside another £850m for ripping off UK customers. The bulk of that was a
£600m bill for payment protection insurance in the three months to June alone,
taking its total PPI cost to date to an eye watering £6billion. It also set
aside £250m for compensating customers missold packaged bank accounts. Yet that
didn't stop Barclays estimating it would pay nearly £1billion of bonuses in the
first half of the year, broadly in line with last year. The bumper results come
weeks after Barclays chief executive Antony Jenkins was fired for apparently
not boosting the bank's fortunes fast enough. It came shortly after industry
veteran John McFarlane joined as chairman. Mr McFarlane, who has temporarily
replaced Mr Jenkins, has set out plans to turbo charge the firm, focusing on
its investment bank in its core markets, and its retail arm, including its
booming Barclaycard business. David Hillman, spokesperson for the Robin Hood
Tax campaign, said: “Barclays' results rarely come without massive provisions
for ripping off its customers, and today is no exception... If banks can afford
to pay out these colossal fines and still turn a profit, they can afford to make
a greater contribution to the public purse." MIRROR
Banks and financial
companies to be banned from forcing customers to call premium rate numbers
Currently, customers looking for help or to complain face
charges of up to 50p a minute from a mobile when calling numbers beginning 084
or 087. But from October 26, these calls will be charged at the same level as
dialling a standard rate number — typically no more than a few pence per
minute. The new rules, which were announced by City watchdog the Financial
Conduct Authority (FCA), will also bar banks and insurers from profiting from
customers by taking a share of the cost of calls to premium rate lines. At
present, many banks and building societies print premium rate contact numbers
on the back of their customers’ credit and debit cards. The City watchdog said
that, in future, customers who call these numbers will have to be redirected by
banks on to cheaper lines. And in a further boost for consumers, the FCA also
announced that financial firms will be forced to publish numbers of all
customer complaints made to them — no matter how minor they appear to be. As
things stand, companies are obliged to include in their official complaint
statistics only those gripes that take more than one business day to sort out. But
from September 2016, they will have to list every single complaint they receive
— even the ones that have been resolved quickly. However, companies will be
given three days to deal with these minor complaints, instead of the one day
they are allowed at the moment. DAILY MAIL
Cancellation of Trans-Pennine and Midland rail upgrade kept secret until after election
The electrification of the Trans-Pennine and Midland main
line routes was put on hold in June, shortly after the election, when the
government said it received an assessment of the state of major Network Rail
projects. But Network Rail boss Mark Carne said the Department for Transport
was told in March that decisions about deferring schemes could be due within
months. The department had previously said it was not told Network Rail's board
expected delays until after the election. Labour accused the government of a
cover up, where the Conservatives promised to electrify lines in their
manifesto knowing the projects would be shelved. Shadow minister Lillian
Greenwood said the Conservatives had "serious questions to answer"
about why they promised rail electrification in their manifesto. In a letter to
shadow rail minister Lillian Greenwood, Mr Carne wrote: "In mid-March
2015, Network Rail informed DfT that decisions may need to be made in the
coming months about the deferral of certain schemes." Mr Carne added
Network Rail had recommended another assessment was made before decisions were
taken. It was completed after the election. He said Network Rail, the DfT and
the Office of Rail Regulation all knew around 80% of current projects were
"at an extremely early stage of development, with inevitably high levels
of uncertainty regarding their cost". BBC NEWS
Morrisons faces probe
over demanding one-off payments from suppliers. Again
The big retailers have been condemned for using their buying
power to force suppliers to pay large sums to keep their goods on the shelves. In
this latest episode, buyers at Morrisons are accused of trying to secure
one-off payments from about 20 suppliers in a potential breach of a
government-backed code, with only “a handful” blocked by the supermarket’s
legal team. A government-backed code prohibits one-off demands and states that
supermarkets must not “vary any supply agreement retrospectively”, except in
very specific circumstances. An internal email from Morrisons’ legal team, seen
by the Guardian, also tells buyers to get advice on how to continue to demand
one-off payments from suppliers but satisfy regulators. The email says: “We
have seen a number of requests for H1 [first-half] funding recently that don’t
appear to be based upon any existing supplier obligation.” It goes on to advise
buyers to contact them for advice on how to “construct arguments that are
credible” in order to continue to demand such payments - meeting the letter of
the code but, it could be argued, not the spirit. The Groceries Code
Adjudicator (GCA) is investigating the emails. Under powers finalised by
parliament earlier this year, the GCA now has the power to fine retailers up to
1% of UK annual turnover, if they breach the code. For Morrisons that would
amount to £168m. A survey of suppliers published by the GCA last month, 30% of
Morrisons suppliers thought the supermarket rarely complied with the grocery
code and a further 2% thought it never did - making it the second worst
performer of the ‘big four’ supermarkets behind Tesco. GUARDIAN
Liquid Gold Saver?! Ban misleading
account names, regulator tells banks
Enticing names such as Liquid Gold and Gold Saver on savings
accounts that pay some of the worst rates of interest could become a thing of
the past under rules proposed by the City watchdog. In a proposed shake-up of
the £700bn savings market, the Financial Conduct Authority (FCA) said accounts
with low interest rates should not be given names that are misleading, and that
it would take action against banks and building societies that continue to do
so. The idea, opposed by banks, should see the end of accounts like the
notorious Liquid Gold from Halifax. The account has been around since the 1980s
when Arthur Daley, played in the ad by George Cole, promised the account would
be a “nice little earner”. At the time it paid 10% interest; now it pays 0.05%.
The FCA will introduce a series of rules to force firms to provide clear
information on the interest rates on their cash savings products as well as
alerting consumers to changes in interest rates or the end of an introductory
rate. One of the proposed new rules will stop banks and building societies from
a favourite way of confusing customers into choosing the worst deal. Anna Bowes
of savingschampion.co.uk explained: “At the moment many banks tell someone their
bonus rate will end months before it is due to do so. This means they either
switch then and lose the extra interest or risk waiting and forgetting to do
so.” The proposed new rule is to tell savers about the end of a bonus rate in a
timely fashion, no more than 14 days before it is due to end, perhaps by text. Andrew
Hagger of financial website moneycomms.co.uk said the FCA’s measures were
“welcome but long overdue... Too often banks and building societies offer best
buy deals for new customers while hoards of loyal savers on the back book are
left with long forgotten deals paying next to nothing.” GUARDIAN
Big businesses should commit to renounce aggressive tax planning, says HMRC
The government wants the UK’s largest businesses to sign a
voluntary code of conduct on tax which would see them renounce aggressive tax
planning and vow to follow the spirit as well as the letter of the law. Under
the voluntary code of conduct, businesses would avoid structuring their
transactions in artificial ways that serve only to slash their tax bills. The
draft code states: “In all cases, the business should reasonably believe that
transactions are structured in a way that gives a tax result which is not
contrary to the intentions of parliament.” Big businesses would also be obliged
to publish an annual tax strategy, signed off by a named executive at board
level, under new rules proposed by HM Revenue and Customs. Businesses may have
to publish whether the UK group has an effective tax rate, what that rate is,
and what measures the business is taking to maintain or reach this target.
While UK corporation tax is currently 20% and will drop to 18% in 2020, some
businesses pay more or less tax depending on how they structure their
companies. Vodafone, for example, paid no UK corporation tax in its most recent
financial year. The measures would apply to businesses with a turnover of more
than £200m or more than £2bn of assets, and HMRC believes having companies
publish their tax strategies could bring in about £65m a year in extra
receipts. GUARDIAN
Payday scandal: Cash
Genie to pay £20m to 92,000 customers after rip-off tactics exposed
The high-credit lender has admitted to exploiting customers
by rolling over their loans without consent and without proper checks of
customers’ financial health. Cash Genie also piled on fees and interest to
customers, which were found to be at unfair levels by the regulator Financial
Conduct Authority (FCA). This included
charging £50 to transfer debt to its sister debt collection firm, even though
the move incurred no additional costs. Customers
who had provided information to other payday firms that were part of the same
group also had their loan used to take payment for existing Cash Genie loans
without their consent. In a number of cases customers were encouraged to apply
to sister websites for loans and give their banking details under the false
pretence that the loan had been pre-approved, according to the FCA. Cash Genie
also failed to send annual statements to customers who had not repaid their
loans after 12 months, which means it should not have then applied any further
fees or interest to accounts. The high-credit lender handed itself over to the
FCA last year over unfair practices and agreed to carry out a redress scheme
and review of past business. Affected customers do not need to take any action
and Cash Genie should have made contact by 18 September 2015. Cash Genie
stopped offering new payday loans to customers in September 2014, three months
after referring itself to the regulator. Its US-based parent firm, EZCORP,
announced shortly afterwards that it would leave the UK payday lending market
in 2015. EXPRESS
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