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Thursday, 15 September 2016

Thursday, September 15, 2016 Posted by Hari No comments Labels:
Posted by Hari on Thursday, September 15, 2016 with No comments | Labels:

Bank of England to buy “tax dodging” Apple debt to encourage it to invest here
In the Bank of England’s latest attempt to stimulate the economy, it announced a list of 100 companies, including Apple, whose debt it will start hoovering up with £10bn of freshly printed sterling. The hope is that this will ultimately spur investment and provide a boost for the wider economy, which has been hit by uncertainty surrounding the Brexit vote. For the first time, the BoE is targeting its stimulus package at overseas firms, including McDonalds, France’s state-owned electricity firm, EDF and German car-maker, Daimler, which owns Mercedes. UK-based companies including Vodafone and BP are also featured. However, several experts have pointed out that the Bank cannot track where the money goes, meaning there is no guarantee that the companies actually invest extra money at all. The Bank said it included companies that made “a material contribution to economic activity in the UK,” which included those, “with significant employment in the UK or with their headquarters in the UK”. This is not the first time the Bank has turned on the printing presses to buy up company debt; it did so at the height of the financial crisis in 2009, but the majority of previous rounds of so-called quantitative easing have focused on purchasing government bonds. This is the first time the Bank has extended QE to non-UK firms. Some economists have questioned whether previous monetary stimulus has benefited the whole economy or simply served to artificially inflate asset prices. Apple is particularly controversial. In August the European Commission ordered the California technology giant, the most valuable publicly traded company in the world, to pay €13bn (£11bn) in back taxes to Ireland over a “sweetheart” deal which, the Commission claims, allowed Apple to pay just 0.001 per cent tax on its sales in some years. INDEPENDENT

Number of workers on zero-hours contracts rockets by 20% in one year to hit nearly a million as pressure grows on Theresa May to tackle job insecurity
A record 903,000 people reported they are now working on the controversial contracts - which do not guarantee a minimum number of hours - an increase of 156,000 since last year. Nearly 3 per cent of the UK workforce are not guaranteed a minimum number of hours, the Office for National Statistics (ONS) figures show, increasing pressure on Theresa May to meet her pledge of tackling job insecurity. Women make up 55 per cent of those on zero-hours contracts, while one in five of those on the contracts is in full-time education. The majority of workers on zero-hours contracts are young, part-time or in full-time education. The average number of hours worked by people on the contracts is 25 hours a week, with around a third saying they want more hours. Campaigners said today's latest estimates found in the ONS' Labour Market Survey, shows zero-hours contracts have moved well beyond the student job market, with half of the latest increase aged 25 and over. The Business department said Government legislation had stopped firms banning workers on zero-hours contracts from working elsewhere, but added that seven in ten workers on the flexible working arrangements were happy with the number of hours they work. DAILY MAIL

UK domestic policies dented middle incomes, not globalisation, says Resolution Foundation
The Resolution Foundation said welfare cuts and housing costs were largely to blame for the dwindling fortunes of the lower middle classes during certain periods in the two decades before the 2008 financial crisis. The thinktank said too much weight has been given to the idea that an acceleration of global trade between 1988 and 2008 and the swelling middle classes in China dented the fortunes of lower middle income households in richer countries. Resolution said: “Domestic policy is central to determining working people’s living standards even in a globalised world. Changes to trade policy, even where desirable, are not a substitute for progressive taxes and benefits, fair wage policies and sufficient housebuilding.” In an analysis of the 20 years to 2008, it found that stagnating or declining incomes in the UK could often be explained by “identifiable factors such as rising housing costs, welfare policy and economic shocks – suggesting that global forces are only one part of the story”. The thinktank claims that the so-called “elephant curve”, which suggests very strong income growth for the global middle class in emerging markets such as China, and near-stagnation for the lower middle classes in rich countries, is misleading. GUARDIAN

Barclays cover-up as boss hid report exposing greed culture
Andrew Tinney, former chief operating officer of Barclays Wealth, is accused of hiding a 'highly critical' dossier after it was delivered to his £5million mansion. The Financial Conduct Authority is now seeking to have the 51-year-old banned from senior roles. Tinney, who now works for a Cypriot videogame company, is challenging the decision. The claims date from 2012 when he was asked to oversee a clean-up at Barclays Wealth Americas. He commissioned the consultancy Genesis Ventures to produce a report into the division. The study claimed BWA was pursuing a 'revenue-at-all-costs' strategy, presiding over a 'broken culture' in which the business was allowed to spin 'out of control'. One banker questioned by the investigators said that when he reported concerns over potential rule-breaking, he was told: 'I don't have time for this bull****.'  Another said that when their team presented a risk report, a boss threw it across the room saying: 'This is a piece of s***.' It is claimed Tinney was so horrified by the contents he shredded the only hard copy when it was motorbiked to the Surrey home he shared with his wife and children. The FCA report says he discussed the study with his manager, the chief executive of wealth. They agreed to act on it to improve behaviour of the staff – but decided that its contents should not be seen by anyone else. Later that year, however, Barclays was rocked by the Libor scandal, in which traders conspired to rig interest rates. It led to the resignation of chief executive Bob Diamond – once branded the 'unacceptable face' of banking over his pay – and saw the bank hit with penalties of £290million. Tinney was asked about the issue, the FCA claims, and denied the report existed. When one of the bank's lawyers asked Genesis Ventures for a copy, Tinney is alleged to have told them not to release it. Months later, the Federal Reserve Bank of New York asked for a copy of the report. When the bank finally got its hands on the study directly from Genesis Ventures, Tinney was suspended. DAILY MAIL

"Reign of terror" tax credits firm Concentrix will not have contract renewed
Concentrix, the US firm accused of incorrectly withdrawing tax credits from hundreds of claimants, will not have its contract renewed, HMRC says. Concentrix won a £75m contract to try to save the government more than £1bn in incorrect or fraudulent tax credit payments in May last year. Labour MP and chairman of the Commons Work and Pensions Committee Frank Field, who had urged the government to investigate concerns over Concentrix, welcomed HMRC's decision, saying the firm's "reign of terror" was coming to a close. The BBC earlier reported the case of Nicola McKenzie, a teenage mother who had her child tax credits stopped after she was wrongly accused of being married to a 74-year-old dead man. The Treasury has revealed 120 cases since last October where Concentrix did not "fully" meet the performance standards laid out in its contract. But it is feared the actual number may be higher. The Facebook campaign group Concentrix Mums, which has 5,600 members, says hundreds more people have been affected by errors. Tax credits - the Child Tax Credit and the Working Tax Credit - are government payments made to households on low incomes. Concentrix's government contract is based on a payment-by-results model, with the "maximisation of revenue flows" as one of its key requirements - meaning it makes more money if it cuts more payments. BBC NEWS

Greene King to move remaining pub workers off zero-hours contracts
The Suffolk-based company said it was in the process of moving workers to contracts that guarantee a minimum number of hours, following its takeover of the Spirit Pub Company last year. In 2013, Spirit, the owner of chains including Chef & Brewer and Wacky Warehouse, said that most of its 16,000 employees were on the contracts, which give no guarantee of work from one day to the next. The hospitality industry is the biggest user of such contracts, which have been criticised by unions for not offering workers any security over pay. Greene King, which had already moved its staff from zero-hours contracts before buying Spirit in 2015, said it was working on moving employees to new minimum hours contracts. A spokesman said: “We do not have zero-hours contracts in Greene King pubs. Following criticism of its employment practices, Sports Direct said it would offer 18,000 workers at its shops contracts guaranteeing at least 12 hours’ work a week, although it has emerged that this change could take until the end of the year. On Sunday, pub firm JD Wetherspoon said that it would allow 24,000 staff to choose between a zero-hours contract and one offering fixed hours after a successful trial of the scheme. Its chairman, Tim Martin, told Buzzfeed that around two-thirds of staff had opted to move off zero hours and on to guaranteed contracts, guaranteeing around 70% of the typical number of hours they work each week. GUARDIAN

Watchdog to probe banks and building societies as some punished savers but failed to help borrowers after BoE rate cut
Financial institutions including First Direct, which is owned by HSBC, and Scottish Widows, part of Lloyds, seized on last month’s rate cut to a historic 0.25 per cent low to roll back interest rates on their leading savings deals. But – despite warnings from Bank governor Mark Carney – they have not yet reduced borrowing costs for their mortgage customers. Banks make money by lending savers’ cash out to people who take on debt. Some of the profit from interest is passed on to savers and the bank keeps the rest. When savings rates are cut but borrowers’ interest rates stay the same, it means a larger profit is typically going to the bank. Scottish Widows Bank has also cut savings rate without reducing its standard variable rate for mortgages. But a spokesman said its SVR would be reduced from 3.99 per cent to 3.74 per cent on October 1. A string of building societies are also dragging their feet. They include West Bromwich, the seventh largest, which has cut some savings rates by between 0.15 and 0.2 points. A spokesman said it last reduced SVR rates in August 2014, from 5.84 per cent to 3.99 per cent. ‘Our SVR still remains competitive today, even after any recent reductions from other lenders have been applied,’ he said. An FCA spokesman said: ‘We will be writing to all mortgage providers to understand how decisions on the standard variable rate for new and existing mortgage customers have been made in response to the change in the base rate.’ DAILY MAIL

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