Rip-off News round-up. Our pick of the last week's media (Thu 28th January)

Secret deal with regulator OFGEM that lets greedy energy firms hide their obscene profits

Power giants have won a secret battle to hide the scale of the profits they are making by refusing to cut prices. Last April the energy watchdog was bullied into ditching data that show whether households are getting a good deal. These vital figures used to be published monthly. They showed the difference between what power firms were paying to supply energy to your home and what they were charging you on your bill. It was a rough guide to the size of the profits they were likely to make. In the last month before these figures were scrapped, the Big Six energy companies were shown to be charging 9 per cent more than it cost them to provide gas and electricity to households.  This translated into £120 profit per customer, according to regulator Ofgem. But the information was quietly removed. Since then it has been impossible for households to know whether providers are making a fair return.  This is because in the past nine months power firms have benefited hugely as the price of oil has crashed by 54 per cent to a 13-year low of $30 a barrel. In turn, this has slashed the cost of supplying energy to British homes. But the greedy firms have failed to pass on these savings to customers. Just three of the major firms have cut gas prices since April — and by no more than 5.1 per cent. And electricity prices have not budged in two years. In yet another sign that the Big Six are charging too much, smaller companies are using falling oil prices to launch ever-cheaper dual-fuel tariffs. The result is a ballooning gap between the rip-off charges at giant providers and the cheapest deals on the market. We found families can save £405 by switching supplier — a record amount. Providers say they are making less money this year because of the warm winter and have kept prices high to compensate. But experts suspect they are boosting profits while sitting on piles of your cash. And after a major crackdown on the industry was delayed for months,  the energy giants have been left free to profiteer. DAILY MAIL

Tax Dodge: Google expected to reveal growth of offshore cash funds to $43bn

Google is poised to confirm next week that controversial tax structures in Ireland, the Netherlands and Bermuda have boosted its offshore cash mountain to more than $43bn (£30bn), figures from financial analysts suggest. Despite governments around the world promising to crack down on the tech company’s tax avoidance arrangements, Wall Street analysts are confident Google will continue to salt away profits in Bermuda for years to come. Alphabet, Google’s parent company, will report its 2015 earnings next week and is expected confirm that offshore cash funds have grown by about $4bn in just 12 months. Offshore reserves of $43bn, held largely through Bermuda, represent profits from markets outside the US. Of these markets, the UK is the largest, accounting for 17% of non-US sales. But latest published accounts show Google’s UK subsidiary paid just £21m in tax for 2013. Google’s tax structure means income from many major overseas markets – including £4.56bn from the UK – is booked through Ireland. Much of it is then bounced through the Netherlands and back to Ireland and Bermuda. These strategies are known in tax jargon as the “Double Irish” and the “Dutch Sandwich”. Two years ago, George Osborne promised to bring an end the “extraordinary lengths … some technology companies go to to pay little or no tax [in Britain]”, introducing a tax on diverted profits last year. Last week, however, Google reached a long-awaited settlement with HRMC – in which it agreed to pay £130m in back taxes and bear a greater tax burden in future – that effectively sanctioned its continued use of Irish companies to book UK sales. Only a small increase in UK tax must now be paid by Google’s British arm. GUARDIAN

Tesco knowingly delayed payments to suppliers, with sometimes millions of pounds unpaid for years

The Grocery Code Adjudicator, Christine Tacon, said the supermarket seriously breached the industry's code of conduct to protect grocery suppliers. Tesco apologised for the practices, saying they had harmed its suppliers. Tesco remains under investigation by the Serious Fraud Office (SFO) into alleged accounting irregularities. The grocery ombudsman's investigation began in February 2015 following the revelation of an accounting scandal at Tesco. In September 2014 a £250m black hole was found in the company's accounts - a sum later revised up to £326m - because of the way Tesco booked income from its suppliers. Ms Tacon said: "I received internal Tesco emails which encouraged Tesco staff to seek agreement from suppliers to the deferral of payments due to them in order to temporarily help Tesco margins... I also saw internal Tesco emails suggesting that payments should not be made to suppliers before a certain date in order to avoid underperformance against a forecasted margin." Ms Tacon's investigation found that even when a debt had been acknowledged by Tesco, on occasions the money was not paid for more than 12 months, with some amounts taking two years to be repaid, the investigation found. One example involved a supplier owed a multi-million pound sum as a result of price changes being incorrectly applied to Tesco systems over a long period. This was eventually paid back by Tesco more than two years after the incorrect charging had begun. Ms Tacon cannot fine Tesco as she only acquired the power to fine companies after the Tesco investigation began. BBC NEWS

New pension taxes are £5bn/year 'milch cow' for chancellor, says IFS head

George Osborne is using pension taxes as a “milch cow” to pay off the deficit, the head of the Institute of Fiscal Studies has said. The chancellor is expected to announce the results of a Treasury inquiry into tax on pensions in the budget on 16 March. Among the changes being considered is the replacement of variable tax relief on pension contributions with a single, flat-rate of between 25% and 33%, which would cause high earners to lose some of their rebates. Paul Johnson, director of the leading independent thinktank the IFS, said: “The tax regime has been changed and changed again as pension savings have proved something of a milch cow for the current chancellor. “By reducing the amount that can be put in a pension free of tax in any one year and the maximum size of the accumulated pot, he has increased tax revenues by more than £5bn a year.” Johnson said changes to pensions tax relief could cause “the implicit contract at the heart of our pension system [to] buckle under the pressure... Governments of all stripes have recognised that widespread access to good private pensions is an essential part of the implicit deal with the voter — we won’t pay you much of a state pension, but we will make sure you have the chance to save for yourself,” wrote Johnson in the Times. “And at the heart of that deal has been the tax treatment of private pensions. It should go without saying that nobody would tie up hundreds of thousands of pounds in a pension, which they can’t access for decades, if there weren’t some benefit for doing so compared to saving in some other way. That benefit is tax relief.” Former Conservative leadership hopeful David Davis told the Times that such a move would deter people from providing a full state pension for themselves. “It’s problematic because the pension industry used to be the jewel in the economic crown when it comes to having a population looking after themselves.” GUARDIAN

NHS staff cuts: Number of mental health nurses falls 10%

Figures from the NHS’s health and social care information centre, obtained through a parliamentary question, show that the number of qualified nurses working in psychiatry dropped by 10.8% from 41,320 in 2010 to 36,870 in 2015. The figures raise questions about the funding of mental health services, whether NHS workforce planning is delivering enough of the staff needed and the former coalition government’s repeated pledge to introduce “parity of esteem” in the NHS treatment received by patients with mental health problems compared to those with physical ailments.

The sudden drop comes at time when more and more people are seeking mental health treatment from the NHS. Official figures show that the number of people in contact with NHS mental health services has surged by as much as 40% over the same period. Other RCN research from earlier this month, showing that London hospitals had 10,000 nursing vacancies, found that NHS mental health trusts were among those worst affected by the shortage of nurses. The South London and Maudsley trust, England’s largest specialist provider of mental health care, has 440 vacant nursing posts, representing more than one in four (26%) of its total complement of nurses. Similarly, the West London mental health trust is short of 242 nurses – 22% of its headcount. Meanwhile, student nurse bursaries are being abolished as part of the Department of Health’s (DH) plan to boost NHS England’s budget by £8bn by 2020-21 by cutting the budgets of non-frontline NHS organisations such as Health Education England (HEE), which looks after staff training and education, and Public Health England. Forcing would-be nurses to take out student loans will save £650m a year from HEE’s budget by 2018-19 and ultimately £1.2bn a year by 2020-21. GUARDIAN

Appeal court rules bedroom tax discriminatory in two cases

The bedroom tax has been declared unlawful by the appeal court due to its impact on vulnerable individuals, dealing a significant blow to the work and pensions secretary, Iain Duncan Smith. Judges ruled that in two cases – those of a victim of extreme domestic violence and grandparents of a severely disabled teenager – the government’s policy amounted to unlawful discrimination. The first case involved A, a single mother living in a three-bedroom council house fitted with a secure panic room to protect her from a violent ex-partner. The other was brought by Paul and Sue Rutherford, grandparents of Warren, who is seriously disabled child and who needs overnight care in a specially adapted room. In both cases, the claimants faced a cut in housing benefit because they were deemed to be “under-occupying” the additional rooms which were classified as spare. A government spokesman said: “We know there will be people who need extra support. That is why we are giving local authorities over £870m in extra funding over the next five years to help ensure people in difficult situations like these don’t lose out.” But the ruling heaps pressure on the government over the bedroom tax, which the Labour party has vowed to abolish. A DWP evaluation of the policy published last month found that it it was not meeting its key aim of freeing up larger council properties Just one in nine affected tenants were able to avoid the tax by moving to a smaller property. GUARDIAN

G4S paid to look after empty beds at scandal-hit Medway youth jail

The security firm G4S is being paid for looking after empty beds in a secure training centre (STC) that is the focus of allegations of widespread abuse by staff, the Guardian has learned. The company has received over £260,000 since the abuse story broke. The Youth Justice Board (YJB), which oversees the detention of young people in England and Wales, said that 47 children are detained at Medway STC in Kent. But G4S is being paid to look after the full capacity of 76. Following the allegations, the YJB announced it would stop sending children to Medway. Earlier this month, a BBC Panorama investigation revealed footage, taken by an undercover reporter working as a guard at Medway, in which children were being assaulted by staff, who later boasted about the abuse to colleagues. Staff were also seen talking freely about falsifying records of violent incidents. Under STC rules, if more than two children are fighting, it is classified as staff losing control of the centre and G4S faces heavy fines. Footage showed a guard saying: “If we get an incident with four kids, it will get split up so they, G4S, don’t get fined.” G4S runs England’s three STCs – Medway, Oakhill in Milton Keynes and Rainsbrook in Northamptonshire. But following a damning inspection report last year, the contract to run Rainsbrook was taken away, although the company is in place until May when MTCnovo will take over. The inspection at Rainsbrook found children had been subjected to degrading treatment and racist comments from staff. Six members of staff were dismissed. In 2014, 14 children who had been unlawfully restrained in STCs run by G4S and Serco were awarded damages amounting to £100,000. Neither company admitted liability but paid two-thirds of the damages. The remaining third was paid by the YJB. GUARDIAN