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Thursday, 15 October 2015

Thursday, October 15, 2015 Posted by Hari No comments Labels:
Posted by Hari on Thursday, October 15, 2015 with No comments | Labels:

Rise in UK jobs that fail to pay a living wage, now totalling 6m
The Office for National Statistics says there were 6m jobs paying less than the living wage across the UK in 2014, of which more than half were part-time roles. The living wage, an independently set hourly rate, is based on the cost of living and is currently set at £7.85 outside London and £9.15 in the capital. It is higher than the minimum wage, which from October starts at £3.87 for under-18s, rising to £6.70 for workers aged over 21, and above the national living wage announced by George Osborne in the July budget. The ONS said that in London, the proportion of jobs paying less than £9.15 an hour hit 19% in 2014, after remaining stable at around 13% between 2008 and 2010, while in the rest of the UK the proportion below the £7.85-an-hour threshold rose from 21% in April 2012 to 23% in April 2014. Northern Ireland was the country with the most low-paid roles, with 29% of jobs paying below the living wage. In contrast, London, the south-east and Scotland had the fewest low-paid jobs, each with 19%. In retail, the ONS found that 1.5m jobs around the UK paid less than the living wage. Alison Garnham, chief executive of Child Poverty Action Group, said low paid workers were already struggling to get their families out of poverty, and changes to tax credits announced by the government would make matters worse. GUARDIAN

NHS crisis deepens as hospitals rack up £1bn debts in 3 months
The figures, which cover the period April 1 2015 to June 30 2015, show hospitals running up a combined deficit of £930m, with more than three in every four hospitals unable to balance their books. The main reason cited by hospitals for overspending was higher than expected pay costs due to an over-reliance on expensive agency staff to raise nurse numbers. The Healthcare Financial Management Association (HFMA), which represents finance directors, said it had been “182 days since the government vowed to inject £8bn of much-needed extra funding into the NHS and we still await confirmation as to where and when this investment will be made”. The British Medical Association described the deficits as “staggering” and said the NHS was facing “a funding crisis the likes of which we have never seen”. BMA representative Dr Ian Wilson said the extra funding promised by the government was “barely enough for the NHS to stand still. The result is a health service that is buckling at the seams, relying on emergency bailouts and with no real solution to the £22bn funding gap facing it”. “With winter just around the corner, there is a real risk to the quality of patient care as pressure on services and staff will only intensify,” added Dr Wilson. The data, covering all hospitals — including foundation trusts, which are generally regarded as the service’s higher performers — will test George Osborne’s determination to avoid a further bailout for the service. FINANCIAL TIMES

Half of world's wealth now in hands of 1% of population
The middle classes have been squeezed at the expense of the very rich, according to research by Credit Suisse, which also finds that for the first time, there are more individuals in the middle classes in China – 109m – than the 92m in the US. Tidjane Thiam, the chief executive of Credit Suisse, said: “Middle class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend which saw the share of middle-class wealth remaining fairly stable over time.” The report shows that a person needs only $3,210 (£2,100) to be in the wealthiest 50% of world citizens. About $68,800 secures a place in the top 10%, while the top 1% have more than $759,900. The report defines wealth as the value of assets including property and stock market investments, but excludes debt. About 3.4 bn people – just over 70% of the global adult population – have wealth of less than $10,000. A further 1bn – a fifth of the world’s population – are in the $10,000-$100,000 range. Each of the remaining 383m adults – 8% of the population – has wealth of more than $100,000. This number includes about 34m US dollar millionaires. About 123,800 individuals of these have more than $50m, and nearly 45,000 have more than $100m. The UK has the third-highest number of these “ultra-high net worth” individuals. A year ago, the the UK had been singled out as the only country in the G7 where inequality had risen this century. In this year’s report, the authors say:  “[In the UK] wealth inequality has risen since 2000, as the gap in wealth per adult between the lower segment and rest of the population has increased.” GUARDIAN

Water companies pocket £800m windfall, NAO finds
The National Audit Office (NAO) estimated that between 2010 and 2015, water companies gained £410m from lower corporation tax rates and a further £840m from lower than expected interest payments. Over the same period the companies absorbed costs and provided water bill discounts worth up to £435m, leaving them with a net gain of £800m. However, customers' bills had not fallen because Ofwat had not properly "balanced the risks" between water companies and consumers, blaming poor regulation by Ofwat. Ofwat rejected criticism of its price control regime. Water prices will fall by 5% in real terms over the next five years, Ofwat said earlier this year. Bills have risen by 40% in real terms since privatisation in 1989, with the biggest rises coming between 1990 and 1995. Water bills accounted for about 2.3% of average household spending in 2013 and more than 5% for the poorest households. BBC NEWS


Facebook paid £4,327 corporation tax despite £35m staff bonuses
Facebook made an accounting loss of £28.5m in Britain in 2014, after paying out more than £35m to its 362 staff in a share bonus scheme, according to the unit’s latest published accounts. Operating at a loss meant that Facebook was able to pay less than £5,000 in corporation tax to HM Revenue for the year. The level of tax contribution by Facebook, which claimed in 2013 that at least a third of UK adults visited its site every day, will add to the debate about how to ensure that multinationals make fair tax payments in each country in which they operate. Last year, Facebook made a profit on its worldwide operations of $2.9bn (£1.9bn), on revenue of $12.5bn. UK revenues were £105m last year. John Christensen, the director of campaign group the Tax Justice Network, said: “it’s very likely they’re using all the usual techniques to shift profits around.” George Osborne, the chancellor, has pledged to crack down on tax avoidance by global firms by swiftly legislating to enact a new set of rules drafted by the Paris-based Organisation for Economic Co-operation and Development (OECD), which has become a hub for global tax reform in recent years. The so-called BEPS rules are aimed at cracking down on “base erosion and profit-shifting”: the practices used by many global firms to minimise their tax liabilities by recording profits in low-tax jurisdictions. “Taxes should be paid where profits are made,” Osborne tweeted from the International Monetary Fund’s annual meetings last week. Separately, the chancellor has introduced a diverted profits tax, known as the “Google tax”, aimed at preventing hi-tech international firms from minimising their tax liabilities in the UK. GUARDIAN

Sell more or lose your job, Lloyds staff told: Bosses demand mortgages, insurance and credit cards are pushed aggressively
Mis-selling of payment protection insurance has forced the bank to set aside more than £13billion so far to compensate customers. The scandal has been blamed on the ruthless sales culture at banks, with branch staff given sales targets. The most prolific were given champagne and ‘grand in the hand’ cash bonuses. Those who fell short were often pushed out of their jobs. The situation had been so out of hand that in December 2013, Lloyds was fined £28million by the Financial Conduct Authority. But despite scrapping sales targets in January, Lloyds bosses have begun a crackdown on staff who do not sell enough. In an unfortunate twist, Lloyds has named the operation Project Labrador – after the dog breed known for being greedy and eating anything. Under Project Labrador, those failing to sell enough mortgages or fee-charging current accounts will have to take ‘knowledge tests’. If they still fail to hit sales targets – called ‘needs met’ targets by Lloyds – for six consecutive months, the bank will put them on a mandatory ‘performance improvement plan’. Those failing to sell more could eventually lose their jobs. Lloyds Trade Union said the pressure to sell contrasts with instructions earlier this year, when executives had warned of the danger of ‘product push’. It said the bank could be resurrecting its pressurised sales culture ‘by the back door’. DAILY MAIL

Pensioners pull further ahead as UK inflation turns negative
Prices fell by 0.1 per cent year on year — meaning those benefits that are linked to inflation will not increase in April next year. Many other benefits have already been frozen. Disability benefits such as care or attendance allowances, which remain linked to inflation, will now not rise at all unless the government chooses to use a different uprating mechanism. The zero reading will also be bad news for those on public sector pensions, which are linked to CPI and will now see no rise next April. Around three-quarters of private sector schemes still use the higher RPI measure for calculating increases, which stood at 0.8 per cent in September. State pensions are subject to a “triple lock guarantee”, which means they rise by whichever is higher out of earnings, prices or 2.5 per cent. Katie Schmuecker, policy and research manager for the Joseph Rowntree Foundation, said there was now a “big disparity” in the way pensioners and working age people were being treated in the benefit system. Around 14 per cent of total government spending is aimed at older people, the IFS calculates, compared with just 5 per cent on families with children. The Institute for Fiscal Studies estimates the freeze will save the government £4bn and the combination of the seven-year squeeze will mean a total real cut of 8 per cent in the value of benefits between 2013 and 2020. This is only the second time since 1960 that Britain’s headline consumer inflation rate has turned negative, after April this year. The current exceptionally weak inflation is driven primarily by falling energy prices and the relative strength of sterling keeping down the cost of imports. The Office for Budgetary Responsibility’s July forecasts assumed that inflation in the third quarter of this year would be zero before picking up rapidly to hit 1 per cent in the first quarter of next year. This is when the zero increases in those benefits will begin to bite. FINANCIAL TIMES

Two UK bankers go on trial in the US for alleged Libor tampering
The former traders have pleaded not guilty to rigging the London inter-bank offered rate (Libor) while working for Dutch bank Rabobank. They are accused of rigging rates connected to the dollar and the yen. Regulators in the UK and US been investigating whether banks lied about rates in order to profit. The investigations have led to 22 charges in the US and the UK and £5.9bn paid in settlements by financial institutions. Lawyers for Anthony Allen, 44, and Anthony Conti, 46, are expected to argue that UK regulators were aware that banks reported Libor numbers that were in their self-interest. In August, former UBS and Citigroup trader Tom Hayes was sentenced by a UK court to 14 years in prison for his role in manipulating Libor. Libor is the rate at which banks borrow money from one another and is the basis by with other interest rates, including mortgage rates, are set. Banks have been accused of misreporting rates in order to profit off trades made on Libor-dependent products and services. BBC NEWS

Former Anglo Irish bank chief David Drumm faces 33 criminal charges in US
The former chief executive of the Anglo Irish Bank, David Drumm, which was at the centre of the country’s economic crash, is facing 33 criminal charges. 33 separate arrest warrants were issued by a judge in Dublin in June 2013 for a range of alleged crimes including forgery and conspiracy to defraud. Drumm, 48, who has been living in the US for the past six years, was arrested by US Marshals on Saturday acting on an extradition warrant. He is also accused of a number of offences relating to “unlawful financial assistance” to a person or company in connection with the purchase of shares and false accounting. The alleged offences carry sentences of between five years and life imprisonment. Anglo Irish was Ireland’s third-biggest bank and its collapse forced the government to nationalise it in 2009. Anglo, which was one of the main lenders to property developers, was losing up to €1bn a day at the time and was widely seen as the catalyst for Ireland’s banking collapse and consequent bailout by the International Monetary Fund, the European Central Bank and the EU in 2010. GUARDIAN

Pre-payment energy provider Utilita fined £560,000 after wrongly blocking customers from switching supplier
Regulator Ofgem found the company had blocked 40,000 customers from moving to other suppliers. Refunds totalling £110,000 will be paid to customers who lost out financially as a result. Utilita has apologised and will pay the rest of the penalty to debt charity StepChange. Ofgem described the actions of Utilita as "unacceptable" and said that the ability for customers to switch was fundamental to a well-functioning energy market. The regulator found customers were blocked in various ways between June 2010 and May 2015, such as automatically blocking those on fixed-term contracts. The company also failed to write to customers to explain why their switch had been blocked and what action they could take to resolve any issues. A spokeswoman for Utilita said: "We would like to apologise unreservedly to those customers whom we wrongly prevented from switching supplier... We will be contacting those customers as quickly as we can to rectify this." BBC NEWS

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