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Thursday, 7 July 2016

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

London pays almost a third of UK tax, exposing economic divide
A study by the thinktank the Centre for Cities found that London generated almost as much tax as the next 37 largest cities combined and increased its share of “economy taxes” underpinning the Treasury’s finances to 30%, up five percentage points since 2004/5. Economy taxes are tied to economic growth, the report said, and include income tax and national insurance contributions, VAT, land and property taxes, corporation tax, capital gains tax, inheritance tax and stamp duty on shares. Other major cities have seen little or no growth in their tax income over the past decade. The report found that while London generated nearly 25% more tax for the exchequer adjusted for inflation, Manchester’s tax haul grew by only 1%, while it plunged in Birmingham, Glasgow and Leeds. The report, which covers 62 cities, said: “In the face of political and economic uncertainty and potential shocks to the economy, the growing reliance on fewer places – and London in particular – to generate more revenues is a risky situation for the exchequer to be in compared to one where more cities are making a positive contribution to the national tax pot.” The findings are likely to intensify debate about government plans to devolve powers and public spending to regional centres based around cities in the Midlands, the north and the west. The thinktank said the research revealed the loss of economic strength in places that mainly voted to leave the EU in the recent referendum. GUARDIAN

Four in five professionals work longer than they are paid for
More than four out of five professionals work more than their contracted hours - and a third never take a lunch break, according to new research. The study suggests businesses are facing an 'alarming' burnout epidemic with 81 per cent of employees working beyond their contracted hours. And those that work in high level positions are twice as likely to work more than 10 hours over their contracted hours (42 per cent) as those at entry level (21 per cent). The survey of 2,600 professionals in sectors such as banking and finance by global professional services recruiter Morgan McKinley found that 75 per cent of employees felt obligated to work beyond their contracted hours. But businesses are not rewarding these staff, with only around one in eight (13 per cent) saying that they are compensated for working extra hours. The figures revealed that less than a third of professionals (32 per cent) believe that they are productive during the extra hours that they work. A third (34 per cent) don't take their lunch break at all, with millennials (21 per cent) being the largest group to have a working day without their lunch break. When they do finally leave the office, three out of four are 'sometimes' or 'always' working from a mobile device. Many businesses have a widening gap between modern business philosophy around 'smart' working, and the reality of old fashioned noses to the grindstone. DAILY MAIL

MasterCard facing £19bn damages claim over inflated card charges
A collective damages claims, led by former financial services ombudsman Walter Merricks – who has instructed US-based law firm Quinn Emanuel, is to be filed under the Consumer Rights Act 2015. It claims MasterCard set unlawfully high interchange fees – charged to stores when shoppers swipe their debit or credit cards – for 16 years, which were passed on to consumers in the form of inflated prices for good and services. In 2014 the European court of justice declared that such fees were a violation of EU antitrust rules. On 29 April last year, the European parliament and the council of the European Union adopted the interchange fee regulation, and caps of 0.2% for debit cards and 0.3% for credit cards came into effect on 9 December. Merricks said: “Although most of us did not know [of the overcharging], experts who study the retail economy knew it was happening – and so did MasterCard.” Boris Bronfentrinker, lead partner at Quinn Emanuel, said: “This is precisely the type of claim for which the new collective action regime was established. This is a landmark case where unlawful anti-competitive conduct has harmed UK consumers. “That harm, likely to be in the hundreds of pounds, is not large enough for any individual consumer to bring their own claim. But by aggregating the claims and bringing them on a collective basis, all UK consumers who lost out will get the compensation they are owed.” GUARDIAN

Four ex-Barclays traders jailed for Libor fraud
Jay Merchant, a 45-year old trader based in New York, was sentenced to six-and-a-half years in prison by judge Anthony Leonard at Southwark Crown Court. He will be joined by his underling Alex Pabon, aged 38, who was given a sentence of two years and nine months. Another junior trader, the 35-year old Libor submitter Jonathan Mathew, was given four years in jail. His boss Peter Johnson, 61, pleaded guilty before the trial and was also given four years. Mr Merchant was told he bore the “greatest responsibility” for the crime, which saw him and his junior trader repeatedly ask Barclays’ Libor submitters to adjust the submission to suit his trading book. As a result Mr Merchant hoped to benefit to the cost of the counterparties on the other side of the trades who, the prosecution said, would not be aware that Libor was being fixed. As Libor is used by borrowers and lenders across the world to set prices in trillions of pounds-worth of loans, deals and derivatives transactions, the traders’ activity could have had a major knock-on effect globally. The manipulation scandal has also hurt banks, including Barclays, which was fined £290m in 2012. The former bankers are expected to serve half of their sentences before being released on licence. The other two defendants – Stylianos Contogoulas and Ryan Reich – will face a retrial, the Serious Fraud Office has announced. Previous trials have seen former UBS and Citi trader Tom Hayes jailed for 11 years, while six former brokers accused of working with him were acquitted. TELEGRAPH

Councils too quick to send in bailiffs, says Citizens Advice
A report from Citizens Advice says some councils also add extra charges, or take court action, rather than arrange manageable repayment plans. The effect is to push people who are in financial difficulty even further into the red. In many cases, council tax payers who miss a monthly payment are then required to pay the whole of the remaining cost for the year in one go. Citizens Advice wants that practice to be stopped. In one case uncovered by the charity, someone who owed £27 to the council found their debt rose to £417 by the time that fees had been charged and bailiffs had been called in. The Local Government Association (LGA) said it agreed that use of bailiffs was a last resort. It said that before that happens, people should have been written to, and helped with alternative payment plans. "Councils have a duty to their residents to collect taxes, so important services are not affected," said an LGA spokesperson. BBC NEWS

Secret deal that may sink final salary: US giant wins landmark fight to walk away from UK pension promise
The move tears apart an important principle of pensions law, which is that any benefits promised to savers cannot be reversed. Engineer CH2M has been given permission to dump 3,000 savers from the Halcrow scheme into the lifeboat Pension Protection Fund after arguing it has no legal responsibility for the promises made to the British workers before it took over the 148-year-old company in 2011. Since then, the black hole on the Halcrow final salary scheme has climbed to £500million. And now, in a deal that is thought to be the first of its kind, CH2M has managed to argue that pensioners must accept lower retirement incomes than they were promised or have the scheme handed over to the PPF. Under this arrangement those who have not yet retired will receive an automatic 10 per cent cut to their payouts. This is also highly unusual as only firms that have gone bust are allowed to put their pension schemes in the PPF. Colorado-based CH2M – which has a number of lucrative contracts including work on the High Speed 2 Railway – is solvent and made a £60million profit last year. It is a move that experts believe poses a threat to thousands of other company schemes which have giant pension deficits, particularly those with foreign owners. Labour MP John Mann, who sits on the Treasury Select Committee, said: 'These employees have paid into the pension and this company shouldn’t be trying to wriggle out of its responsibilities.’ CH2M said that without being able to pare back generous annual cost of living increases the scheme’s members receive, it will have no choice but to put Halcrow into insolvency. The deal has been thrashed out by CH2M, the Pensions Regulator and the trustees of the Halcrow Pension Scheme. DAILY MAIL

Energy inquiry accused of 'turning the clock back'
The CMA report recommended that price comparison websites should no longer be obliged to show deals on which they do not earn a commission. Consumers would therefore be unable to see some of the cheapest deals available. The CMA report was released on June 24, the day of the EU referendum result. Angus MacNeil, the chairman of the Energy and Climate Change Committee (ECCC) said the CMA's recommendation would mean that price comparison sites would become advertising sites. "This will lead to further consumer distrust of the whole edifice around energy," he said. Six small suppliers previously wrote to the energy secretary, Amber Rudd, to express their concern about the plans. In response, Roger Witcomb, chair of the CMA's energy market investigation panel, said: "What we're doing is putting energy back where motor insurance and home insurance and broadband deals already are," he told MPs. He said that Citizens Advice already runs a website which compares all the energy deals available. "We only need one of those," he said. In February 2015 a report by MPs on the ECCC criticised price comparison sites for "hiding" the cheapest deals. It said consumers who had been misled as a result should receive compensation. The CMA report found that 70% of domestic customers using the big six suppliers were on expensive default variable tariffs. As a result it said that such consumers could save £300 a year by switching. Overall consumers were paying £1.4bn more than they should be, a figure downgraded from the CMA's previous estimate of £1.7bn. BBC NEWS

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