Thursday 7 April 2016

Thursday, April 07, 2016 Posted by Hari No comments Labels:
Posted by Hari on Thursday, April 07, 2016 with No comments | Labels:

Top UK earners to receive as much in handouts as poorest by 2020
A new analysis by the Fabian Society shows the budget was just the latest step in a radical reshaping of the welfare state, which has shifted resources from the poorest in society to the better-off. The wealthiest 20% of Britain’s earners will receive almost as much support from the state through the “shadow welfare” of generous tax-breaks by 2020, as the poorest fifth take home in benefits. Andrew Harrop, the Fabians’ general secretary, said: “By the end of the decade, if the Conservatives deliver on their manifesto promises, households in the top fifth of the income distribution will be receiving an average of £9,400 a year in tax allowances and welfare payments; while the poorest fifth of households, for whom benefits may be their only source of income, receive an average of £10,200.” Increases to the tax-free personal allowance has taken more of the lowest-paid out of income tax. But as the allowance has risen, the benefits of further steps have gone increasingly to workers in the middle of the income distribution, with the poorest – and the unemployed – missing out altogether. The Institute for Fiscal Studies thinktank pointed out in the run-up to the election that 43% of adults already earned too little to pay income tax, so would not benefit from further increases in the personal allowance. Next comes tax reliefs. During a period when many key benefits have been frozen, Harrop says the scale of tax reliefs now effectively amounts to a system of “shadow welfare”. The cash value of the basic personal tax allowances will have increased by 80% in the decade to 2020; while out-of-work benefits have increased by just 12%. That means the average two-earner couple will be receiving more in basic tax allowances by 2020 than an unemployed couple would be given in benefits. GUARDIAN

Banks STILL concealing toxic culture: Lenders accused of covering up damning report into ethics
The new Banking Standards Board (BSB) examined the behaviour of ten institutions in the run-up to Christmas. When this information was shared with the banks they were urged to make it public – but three months later not one has published its results. The alleged cover-up comes just months after City watchdog, the Financial Conduct Authority, sparked outrage by scrapping a probe into Britain’s banking culture. Critics said it was ‘business as usual’ for the City of London. The work was completed at the end of last year and reports were sent to the seven founder members – Barclays, HSBC, Lloyds, RBS, Santander, Standard Chartered and Nationwide Building Society. The FCA cited the BSB inquiry as a reason it dropped its own high-profile probe into banking ethics but many claimed its plans were shelved due to pressure from City financiers. DAILY MAIL

Panama Papers: offshore firm set up by Cameron's father was moved to Ireland in year son became PM
Details of Ian Cameron’s offshore business interests were revealed in the so-called Panama Papers – a leak of 11.5 million documents from the Panama law firm Mossack Fonseca. The disclosures were potentially embarrassing for prime minister David Cameron because he has previously made statements condemning tax reduction schemes. The Prime Minister’s initial response had been to insist that his tax affairs were a “private matter” but after 24 hours of confusion and criticism Mr Cameron caved in to pressure, saying: “In terms of my own financial affairs, I own no shares. I have a salary as Prime Minister and I have some savings, which I get some interest from and I have a house, which we used to live in, which we now let out while we are living in Downing Street and that’s all I have... I have no shares, no offshore trusts, no offshore funds, nothing like that. And, so that, I think, is a very clear description.” But the carefully-worded comments made no reference to whether he or close family members had benefited in the past or stand to benefit in future from Blairmore, the offshore company. Ian Cameron established Blairmore in Panama in 1981 and used a network of officers in the Caribbean to sign paperwork and fill nominal roles within the company to bolster its offshore credentials. TELEGRAPH

David Cameron admits he profited from father's offshore fund
David Cameron has finally admitted he benefitted from a Panama-based offshore trust set up by his late father. After three days of stalling and four partial statements issued by Downing Street he confessed that he owned shares in the tax haven fund which he sold for £31,500 just before becoming prime minister in 2010. He paid income tax on the dividends but there was no capital gains tax payable and he said he sold up before entering Downing Street “because I didn’t want anyone to say you have others agendas or vested interests”. Cameron also admitted he did not know whether the £300,000 he inherited from his father had benefitted from tax haven status as a result of the fact part of his estate was based in a unit trust in Jersey. But the interview appeared unlikely to end scrutiny of Cameron’s tax affairs. GUARDIAN

Britain under pressure to end opposition to tax haven blacklist
Pierre Moscovici, the European commissioner in charge of tax policy, urged member states to throw their support behind his plans for a blacklist of tax havens – an idea dismissed last year by UK officials. He cited the case of Lichtenstein as a success, arguing that a deal to hand over information to the EU was accelerated because the principality wanted to get off the list. Last year, the commission made a first attempt at creating a blacklist when it published the names of 30 “non-cooperative tax jurisdictions”. The list was based on EU member states’ own varying ideas and included the British Virgin Islands, Guernsey, Hong Kong and Panama. The British government, which does not keep a blacklist of tax havens, criticised the move as “deeply unhelpful”. A briefing in the name of Treasury minister David Gauke, seen by the Guardian, described it as “a misleading list, since most countries and jurisdictions which are referred to are as transparent as EU member states”. The Treasury document went on to claim that “the UK’s overseas territories and crown dependencies have put themselves at the forefront of global tax transparency over the last couple of years”. As the Observer reported in January, Treasury officials also lobbied Brussels against action against Bermuda, a tax haven favoured by Google. David Cameron said on Tuesday that no government or prime minister had done more “to make sure we crack down on tax evasion, on aggressive tax avoidance, on aggressive tax planning, both here in the UK and internationally”. GUARDIAN

Zero-hours contracts are making workers more reliant on debt, says bank regulator
The number of workers on zero-hours contracts, which do not offer a minimum number of hours a week, surpassed 800,000 for the first time in the last three months of 2015. This represents about 2.1% of the UK workforce, according to the Office for National Statistics. In its annual business plan, the Financial Conduct Authority (FCA) highlighted the way in which employment patterns and the makeup of the workforce have changed, and an increase in self-employment, part-time work and temporary workers since the onset of the financial crisis in 2008. The FCA said: “These kinds of employment forms may involve less secure contracts and in some cases may make it harder for consumers to plan and save. This is likely to change the products and services consumers seek to fit their new income patterns.” The FCA said slow wage rises meant that people could become more reliant on debt. “Unsustainable levels of debt will make consumers more vulnerable in the event of a shock such as a reduction in income,” the regulator said. GUARDIAN

Libor trial begins: bankers 'made hundreds of thousands from fraudulent trades'
Libor submitter Jonathan Mathew, aged 35, and swaps traders Stylianos Contogoulas, 44, Jay Merchant, 45, Alex Pabon, 37, and Ryan Reich, 34, are accused of conspiracy to defraud from June 2005 to September 2007. All five have pleaded not guilty. The former Barclays bankers regularly asked colleagues to try to move the key interest rate benchmark by a few hundredths of 1pc as such a change could boost profits by more than half a million pounds each day, the court heard. Prosecutors believe the traders and Libor submitters regularly succeeded in doing just that, to the detriment of the bank's counterparties, which included other banks, governments and big companies. One message, submitted as evidence, from Mr Contogoulas in June 2007, when he had moved to work for Merrill Lynch, said: "The important thing is to see three month dollar Libor unchanged... Every quarter tick is around 100k for me." Another message read: "When I retire and write a book about this business your name will be written in golden letters and you'll have an open invitation to my bar in the Greek islands, hee hee." TELEGRAPH

£7.20 an hour: National Living Wage comes into force
The new mandatory National Living Wage (NLW) has come into force, requiring employers to pay workers aged 25 and over at least £7.20 an hour. It is expected to give 1.8 million workers an immediate pay rise. Workers aged 21 to 24 will continue to be paid the National Minimum Wage of £6.70 an hour. Some 1.3 million workers are paid the minimum wage, while another 500,000 who earn slightly more than the current £6.70 an hour will also benefit. The intention is for the NLW to rise to more than £9 an hour by 2020. The policy was announced in last summer's Budget by Chancellor George Osborne, in an effort to create a higher-wage, lower-welfare economy. However, there are fears of job losses as companies struggle to pay the new higher wages. The independent Office for Budget Responsibility has warned that 60,000 jobs could go as a result. For its part, the Living Wage Foundation, which inspired the idea but does not set the level of the NLW, pointed out that its own suggested level of pay - £8.25 an hour and £9.40 in London - was higher than the NLW. They said: "Businesses who can afford to pay a rate that reflects the real cost of living should do so and join over 2,300 employers signed up to pay our higher voluntary Living Wage.” Paul Johnson, director of the Institute for Fiscal Studies, said: "It will have a ripple effect up the earnings distribution, because you will be taking the lowest-paid up to a level close to, or in some cases above, the next rung or two up the ladder." BBC NEWS

Co-op bank boss nets £4m as 'ethical' lender's losses soar to £611m, branches closed and jobs axed
Niall Booker’s pay and perks package rocketed 25% as the lender’s annual losses more than doubled and it slashed nearly 1,300 workers and contractors. The bank, which boasts about its “ethical policies”, closed 58 bank branches and in January announced another 54 would shut by July. He was one of 71 “material risk takers” handed £25million between them. Meanwhile, nine non-executive directors were paid nearly £1million in fees between them. Stefan Stern, of the High Pay Centre which leads the campaign against overpaid executives, said: “It’s a good example of a business that’s lost a grip of reality. It is extraordinary bonuses like this can be justified in the context of such failure.” MIRROR


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