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Thursday, 5 January 2017

Thursday, January 05, 2017 Posted by Hari No comments Labels:
Posted by Hari on Thursday, January 05, 2017 with No comments | Labels:

Row over 'affordable' starter homes that will cost up to £450,000
Housing minister Gavin Barwell pledged that 2017 would see the first wave of the discounted homes built on brownfield sites in 30 local authority areas around England. But Labour and the housing charity Shelter said it was a nonsense to describe them as “affordable” when they would cost up to £450,000 each. Furthermore, Mr Barwell was unable to say how many homes would be built this year – making the original target of 200,000 by 2020 impossible, Labour said. Ministers had suggested that – under Theresa May’s leadership – the Government would refocus the starter homes project to include some properties to rent, as well as to buy. But the houses to be built this year will be made available exclusively to first-time buyers aged between 23 and 40, at a discount of at least 20 per cent below market value. That means a cap of £250,000 outside London – but a ceiling of an eye-watering £450,000 in the capital. Yet, most controversially, the starter homes will count towards the Government’s target to build 400,000 new “affordable homes”. Roger Harding, Shelter’s director of communications, said: “Efforts to build more homes are welcome, but these starter homes are only likely to benefit people who are better off and already close to buying." The first areas will begin construction later this year. INDEPENDENT

Young people with the best paid jobs also likely to inherit the most wealth
Britain’s wealth gap will be passed down the generations as well-off older people bequeath property to their already thriving offspring, according to new research from one of the UK’s leading thinktanks. The Institute for Fiscal Studies (IFS) found that today’s young people were likely to inherit more wealth than their predecessors but the benefits would be skewed to those who were already well off. The study concluded that inequality was likely to increase and social mobility hindered as pensioners bequeathed the wealth they had accumulated as a result of rising home ownership and property-price inflation. “Between 2002-03 and 2012-13, the wealth of elderly households (those in which all members are 80 or older) increased by 45%, mostly as a result of higher homeownership and rising house prices,” the IFS study said. It added that 72% of those households now expected to leave an inheritance, up from 60% a decade earlier, with a sharp increase in the proportion expecting to leave a large inheritance. Property wealth has increased and become more widely spread in recent generations. Owner-occupation rose from 30% at the end of the second world war to a peak of 70% at the turn of the millennium, while property booms in the 1970s, 1980s and 2000s have seen house prices rise by almost 300% in real terms in the half-century ending in 2010. As a result of these trends, the IFS said younger generations looked much more likely to inherit than their predecessors. Someone born in the 1930s had a 40% chance of an inheritance, rising to 61% of those born in the 1950s and 75% of those born in the 1970s. But the thinktank warned that future inheritances were set to be highly unequal given that the richest half of elderly households held 90% of the wealth and the richest 10% held 40% of the wealth. “Hence a ‘lucky half’ of younger generations look likely to get the vast majority of inherited wealth.” The largest inheritances would in the main go to those who were already well off. More than half of those likely to secure an inheritance of at least £250,000 had incomes in the top 20% of the population. Andrew Hood, from the IFS, said: “The wealth of younger generations looks set to depend more on who their parents are than was the case for older generations. Today’s elderly have much more wealth to leave to their children than their predecessors did. At the same time, today’s young adults will find it harder to accumulate wealth of their own than previous generations did, due to the sharp fall in homeownership for that group, the dramatic decline of defined benefit pensions in the private sector and the stagnation in their incomes.” GUARDIAN

Household debt rises to post-credit crunch high
Bank of England data shows personal debt grew 10.8% in the year to 30 November to £192.2bn in the UK - the highest level since December 2008. Personal debt includes credit cards and bank loans but not mortgages or student loans. Debt charity Step Change is calling on the government to adopt a scheme that gives problem debtors 12 months' breathing space to get back on track. The government says it is reviewing whether to bring in such a scheme. But that decision is now 12 months overdue, and the charity estimates that a further one million people fell into problem debt during this period. Debt counsellors say many debtors are now using credit cards to pay for essential living costs, rather than luxury items. Things are likely to get tougher for many people, with inflation expected to rise in 2017. StepChange says it has experienced the busiest period in its history, with more than 300,000 people calling it for money advice in the first six months of 2016. BBC NEWS

It's Fat Cat Wednesday! FTSE bosses have already earned the average UK wage just two-and-a-half days into the working year
The High Pay Centre has branded today Fat Cat Wednesday because of the shocking figures. It takes the average chief executive of a leading business just two-and-a-half days to earn the average salary of £28,200, said the independent body. It would take just over an hour-and-a-half for the best paid, Sir Martin Sorrell, said the centre. As boss of advertising giant WPP, a long-term bonus took his total package to £70million last year. The findings will pile pressure on Theresa May to tackle excessive pay after she criticised the ‘irrational and unhealthy’ divide between bosses and ordinary workers. Even the Institute of Directors has called for ‘corporate awareness’. It has warned that some executives have ‘assumed massive rewards while taking little of the personal risk’ usually associated with entrepreneurs. The average pay for a FTSE 100 chief executive is nearly £4million or just over £1,000 an hour, said the High Pay Centre. The centre warns that excessive pay deals in the private sector ‘set a bad example’ to the public sector and not-for-profit organisations. This is seen by the huge amounts given to some headteachers and leaders of NHS trusts, councils and charities. Simon Walker, director general at the Institute of Directors, pointed to the threat of an official clampdown. ‘Unless boards show they are listening and responding, the Government’s trigger finger will just get itchier and itchier,’ he said. ‘The problem is that over the past few decades managers have assumed massive rewards while taking little of the personal risk.’ Frances O’Grady, general secretary of the TUC, said: ‘Working people deserve a fair share of the wealth they help create. The Prime Minister must stick to her promise to tackle excessive pay at the top.’ A report from The Equality Trust today added to concerns about the pay gap. It said the average FTSE 100 chief executive earned 172 times more than a nurse, 145 times more than teacher, 137 times more than a police officer and 324 times more than a care worker in the 2015-16 financial year. DAILY MAIL

Zero-hours workers 'face £1,000 pay penalty'
Workers on zero-hours contracts typically earn £1,000 a year less than permanent employees, according to Resolution Foundation research. People on the controversial contracts face a "precarious pay penalty" of 6.6%, or 93p an hour, the think tank has estimated. For those who earn the least, the size of the gap is even greater, at 9.5%. The foundation backed the government's decision, announced last month, to hold a review into modern working practices. Laura Gardiner, senior policy analyst at the Resolution Foundation, said: "Zero-hours contracts have hit the headlines in recent months for their widespread use in Sports Direct and JD Sports. But concern about the use and abuse of zero-hours contracts goes far wider than a few notorious firms. There is mounting evidence that their use is associated with a holding down of wages. As new ways of working continue to grow - from [zero-hours contracts] and agency work to the gig economy and wider self-employment - we need a better understanding of how they help or hinder people's earnings and career prospects.” BBC NEWS

Rail fares: train operators accused of milking the system as rises kick in
Higher rail fares have come into effect, with passengers across Britain facing an average rise of 2.3%, prompting renewed outcry from campaigners. The overall rise in prices will outstrip the increase in season tickets set by the government, leading unions to accuse private train companies of milking the system. Labour party research shows that season tickets have gone up by an average of 27% since 2010, while the TUC found that rail fares had risen at more than twice the rate of inflation and wages over the last decade. According to Labour, some commuters will now payover £2,000 more to travel to work than when the Conservatives came to power in 2010. A comparison of costs on nearly 200 routes shows that the average commuter is now paying £2,788 for their season ticket, £594 more than in 2010. A Virgin Trains season ticket between Birmingham and London now costs £10,200, up £2,172 since 2010, while commuters travelling from Brighton to London on the troubled Southern Rail route now pay almost £1,000 more than in 2010, Labour’s research found. The transport secretary, Chris Grayling, defended the situation. He said: “We are delivering the biggest rail modernisation programme for more than a century, providing more seats and services. We have always fairly balanced the cost of this investment between the taxpayer and the passenger.” The TUC general secretary, Frances O’Grady, said: “British commuters are forced to shell out far more on rail fares than others in Europe. Many will look with envy at the cheaper, publicly-owned services on the continent.” GUARDIAN

HMRC empowered to name and shame tax evasion 'enablers'
Tax advisers, accountants and lawyers who aid the super-rich with offshore tax evasion will face tough new penalties from New Year’s Day, with HMRC now able to publicly name and shame “enablers”. The Treasury said the government’s new powers would see individuals or corporations who take deliberate action to help others evade paying tax facing fines of up to 100% of the tax they helped evade or £3,000, whichever is highest. The new crackdown, first announced by the then chancellor George Osborne in the 2015 budget, will mean HMRC can, for the first time, penalise the facilitators of tax evasion who help to physically move funds abroad or advise on offshore tax saving. A new corporate criminal offence of failing to prevent the facilitation of tax evasion will also be introduced this year, with companies held liable if an individual acting on their behalf as an employee or contractor facilitates tax evasion. Previous rules meant a corporate criminal prosecution was only possible if there was proof that the board of directors were aware and involved in facilitating the evasion. The Treasury said HMRC had secured more than £2.5bn specifically from offshore tax evaders since 2010. However, the department was criticised last November after its new specialist tax evasion unit only successfully pursued one criminal prosecution, despite having identified potential evasion and avoidance worth nearly £2bn after examining the tax affairs of 6,500 super-rich individuals. The Treasury said more action was planned in the coming months, including a consultation on a new requirement for businesses and individuals who create complex offshore financial arrangements that bear the hallmarks of enabling tax evasion to notify them to HMRC. May pledged during her leadership campaign that she would pursue companies and individuals who took part in deliberate tax avoidance. “It doesn’t matter to me whether you’re Amazon, Google or Starbucks: you have a duty to put something back, you have a debt to fellow citizens and you have a responsibility to pay your taxes,” she said. GUARDIAN

Aldi to become highest-paying supermarket in UK
Aldi is to give more than 3,000 staff a pay rise in an effort to leapfrog fellow German discounter Lidl to become the highest-paying supermarket in the UK. Employees at the fast-growing supermarket chain will earn £8.53 per hour and £9.75 if they live in London, starting from 1 February. While Aldi’s hourly rate in the capital will be the same as the new minimum announced in November by Lidl, staff outside London will earn 7p an hour more. Both supermarket chains have now matched or bettered the the voluntary minimum pay suggested by the Living Wage Foundation. Aldi said the increase means it is now the highest paying company in the supermarket sector, adding that 3,356 staff stood to benefit. It pointed out that it also paid staff for breaks, which it claimed Lidl did not. Aldi’s UK chief executive, Matthew Barnes, said: “We employ the best people in retail and invest in their training to enable them to carry out a range of different roles in store... We remain committed to being the best supermarket employer in Britain. This means that we will continue to provide employees with rates of pay and benefits that are the highest in the supermarket sector.” GUARDIAN

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