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Thursday, 9 June 2016

Thursday, June 09, 2016 Posted by Hari No comments Labels:
Posted by Hari on Thursday, June 09, 2016 with No comments | Labels:

Middle-class savings squeeze: a third of ABC1 families borrow to pay an unexpected bill of £500
According to a new YouGov survey, 31% of ABC1 workers, which includes junior managers and professionals, would struggle to pay an unexpected £500 bill. The figure rises to 46% for manual workers and the unemployed. Overall, 14% of those questioned could not pay a bill of just £100 without borrowing. Although inflation is currently low, many workers have not had pay rises for years. The Bank of England said last month that it expected inflation to increase in the second half of the year, which could put more pressure on some households. Women were less likely to have spare cash than men, while almost half of those aged 18 to 24 would not be able to find £500, compared with 23% of those aged 65 and over. The Money Advice Service has found that four in 10 UK adults have no more than £500 in savings, while a survey by ING bank suggested that 28% had nothing at all in their bank account. Family debt stood at an average of £13,520 at the start of the year due to the availability of cheap credit, according to Aviva. The figure had jumped by £4,000 in just six months to the highest since the summer of 2013, the insurer said. The Aviva report suggested that the typical family had a savings pot worth £3,150. BBC NEWS

Mike Ashley admits his Sports Direct staff were not paid minimum wage
Mike Ashley’s Sports Direct is facing a multimillion-pound bill in fines and back pay after the billionaire admitted his company had broken the law by failing to pay staff the national minimum wage. The concession, which was made as Ashley appeared in front of MPs investigating his firm’s treatment of its workers, confirmed the findings of a Guardian investigation last year. Ashley, who could also face being disbarred as a company director because of the breach, admitted that at a “specific time” Sports Direct effectively paid workers less than the minimum wage because they were held back at the end of their shift and searched by security before leaving the company’s warehouse. The practices contributed to many staff being paid an effective rate of about £6.50 an hour against the then statutory rate of £6.70, which potentially saved the FTSE-100 firm millions of pounds a year at the expense of some of the poorest workers in the UK. While the admission that the company was breaching employment law was the main headline, the MPs also extracted a string of revelations, with Ashley telling them that: it was “unacceptable” for the company’s workers to be docked 15 minutes of pay for being one minute late for work; he is struggling to control the company he founded and in which he still owns a majority stake; he would review the use of the controversial “six strikes and you’re out” policy under which workers are sacked for six black marks within six months. But Ashley added: “I’m not Father Christmas, I’m not saying I’ll make the world wonderful.” Union officers from Unite said there had been 110 ambulance callouts to the warehouse, including 38 times when workers had complained of chest pains. Five ambulances had been called to Sports Direct’s warehouse in birth and miscarriage-related matters, including one worker who gave birth in the toilets. MPs also heard that some staff received their wages through a pre-paid card. Staff were charged £10 to get a card, plus a £10-a-month management fee, 75p to use it at an ATM machine, and 10p when they got a text message confirming they had used it. Unite warned that any compensation for breaking the minimum wage laws will likely only benefit the 200 warehouse employees, not the 3,000 temporary workers. GUARDIAN

Unfairly fired: Rogue trader who lost his bank £3.8bn in one of the biggest trading scandals in history awarded £350k damages
Jerome Kerviel was fired by Societe Generale in 2008 and jailed after racking up a record trading loss of £3.8billion at the bank. But yesterday the Frenchman won a claim for unfair dismissal at an employment tribunal in Paris – and £350,000 in damages from Societe Generale, including a £234,000 bonus for his work in 2007. The court ruled that Kerviel, 39, had been fired ‘without genuine or serious cause’ despite bringing the bank to its knees. It said the bank had known about Kerviel’s dodgy trades long before he was shown the door, adding that he was dismissed not for his actions but for their consequences. Kerviel’s lawyer, David Koubbi, said the ruling ‘tore apart the story which Societe Generale has presented from the beginning’. While Societe Generale has sought to pin the blame for the losses entirely on Kerviel, the former trader has claimed his bosses were happy to turn a blind eye so long as his trades were profitable. The bank lost £3.8billion in a matter of days in January 2008 as it rushed to close out £39billion of trading positions taken by Kerviel. He was found guilty of a breach of trust, forgery and computer abuse in 2010 and sentenced to five years in prison, with two years suspended. He was also ordered to repay the money lost by the bank – something he is fighting. DAILY MAIL

BHS executives brand owner Dominic Chappell 'a liar'
The former owner of BHS, Dominic Chappell, has been accused of being "a liar" who had his "fingers in the till" by top BHS managers. The claims were made to MPs at a hearing into the collapse of the firm. In a scathing attack, the ex-chief executive of BHS, Darren Topp, alleged Mr Chappell threatened to kill him during a row over company money. Mr Chappell described that claim as "absolute rubbish" in a comment to a reporter after he had given evidence. Mr Chappell’s Retail Acquisitions bought BHS for £1 last year. Earlier, Mr Topp said he initially took Mr Chappell's claim to be a turnaround specialist and property expert at face value. When Mr Chappell's promises "unravelled", rather than "putting money in" he had "his fingers in the till," Mr Topp said. Former BHS financial consultant Michael Hitchcock was similarly scathing of Mr Chappell and his team. He told MPs: "I think I was duped. I think the technical term is a mythomaniac. The lay person's term is he was a premier league liar and a Sunday pub league retailer. At best." There are questions over Mr Chappell’s decision to transfer about £1.5m out of the company to Sweden. Mr Topp said his initial reaction to hearing of the transfer was to call the police. During a heated phone call, Mr Topp told MPs, Mr Chappell threatened to kill him. "If you kick off about it, I'll come down there and kill you," Mr Chappell is alleged to have said. Meanwhile, Mr Hitchcock said he was forced to change the company's bank mandate to "stop any chance of money flowing outside of the business". Mr Chappell also said he was looking at launching a legal suit against Arcadia and Sir Philip over a BHS property sale by the tycoon to his stepson. He claimed that BHS missed out on £3.5m because of it. The BHS pension scheme, fully funded a decade ago, now has a £571m pension deficit and negotiations over plugging these liabilities formed a key part talks to rescue the retailer. The Business, Innovation and Skills Committee and the Work and Pensions Committee are hearing evidence into the collapse of the 163-store group, which resulted in up to 11,000 jobs losses and left a huge hole in the pension fund. BBC NEWS

One-third of WPP investors revolt over Sir Martin Sorrell's £70m pay
Sir Martin's pay is the largest received by the boss of any British publicly listed company and has increased from the £44m he received last year, when 22pc of shareholders protested against the company's remuneration report. WPP, the world's biggest advertising group, reported an 11pc rise in yearly sales to £4.2bn in the first four months of the year. Standard Life Investments, which holds 17 million shares comprising just under 2pc of the company, voted against WPP's remuneration report, repeating its opposition to Sir Martin’s pay and influence in the boardroom that it had raised at last year's AGM. Euan Stirling, head of stewardship at Standard Life, said: “We clearly move closer to the day that a new chief executive will need to be recruited." He said the money Sir Martin receives could be better used to recruit someone with the “redoubtable talents of Mr Sorrell”. Asset manager Hermes, a 1.2pc shareholder, said before the vote that it would not be supporting the remuneration package, citing concerns about the “remuneration committee’s apparent lack of vigour and stress-testing”. The non-binding vote mirrors recent bust-ups over executive pay at BP, where chief executive Bob Dudley’s £14m remuneration package attracted opposition of 59pc, while Anglo American’s boss Mark Cutifani faced a 42pc “no” vote against his £3.4m compensation last April. TELEGRAPH

Victory for buy-to-let landlords: Court rules building society unlawfully hiked mortgage rates when base rate had not moved
Landlords who took West Bromwich Building Society to court after it raised tracker rates in December 2013 have won an appeal this morning arguing the move was unlawful. Tracker mortgages are meant to rise and fall with any movement of the Bank of England base rate, which has been glued at a historic low of 0.5 per cent since March 2009. However, West Brom argued that in the smallprint of its buy-to-let contracts – the fact it said it could change the rate 'to reflect market conditions' - it was allowed to raise rates despite no movement on base rate for nearly five years. As a result, it bumped up rates by two percentage points. For many, this doubled their monthly repayments. The case went to the Financial Ombudsman who found in favour of the mutual. It stated regulatory capital requirements had changed and funding costs had gone up, meaning the move was reasonable. It then went to court after 400 landlords launched a legal battle in March 2014. It was led by retired mortgage broker Mark Alexander of Shipdham, Norfolk, who argued he was unfairly asked to pay more for a buy-to-let mortgage because the West Bromwich Mortgage Company classed him as an 'investor' not a 'consumer'. They were dealt a blow in January 2015 when a High Court judge ruled in favour of the mutual – but were allowed to appeal. And this morning the group won at the Court of Appeal. It will result in 6,250 borrowers getting a refund. West Brom says it will cost its savers and borrowers £27.5million. The Court of Appeal decided the mutual was not entitled to vary its rates and could not call in the loans at short notice. Some affected landlords have more than one property with a West Brom buy-to-let mortgage, meaning far higher bills. Mr Alexander said the case win sets a precedent for others with tracker mortgages. Lawyer Mark Smith, who represented Mr Alexander, estimated that around 15,000 West Bromwich customers are affected and as many as a million people in total throughout the UK. DAILY MAIL

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