Thursday 30 March 2017

Thursday, March 30, 2017 Posted by Hari No comments Labels:
Posted by Hari on Thursday, March 30, 2017 with No comments | Labels:

Debt-binge Britons stick £20m a day on credit cards: Plastic spending soars amid fears of a fresh crisis as we now owe £67 BILLION
Credit card debt is rising at the fastest rate for 11 years amid a dangerous borrowing binge, it was revealed yesterday. Shoppers put another £562million on plastic last month, or £20million a day, Bank of England data showed. British families now owe a record £67.3billion on their credit cards – around £2,500 per household. The 9.3 per cent rise in credit card debt in the last 12 months is the biggest increase since February 2006. The binge has fuelled fears that the UK is heading for another financial crisis. Jack Coy, an economist at the Centre for Economics and Business Research, said debt-fuelled spending has risen to levels ‘worryingly close to those seen around the financial crisis’. The Bank this week began a major review of lending practices in the UK and warned that the scramble to borrow ever-greater amounts of money was now a major risk to the economy. Yesterday’s Bank report also showed total unsecured debt – including credit cards, personal loans and car finance but not mortgages – hit a record £196billion in February. The last time household debt was mounting at such a worrying rate was in 2005 as Britain hurtled towards the worst financial crisis since the crash that triggered the Great Depression of the 1930s. DAILY MAIL

BT broke competition rules, fined £42m over delays to high-speed cable installation
BT has been fined £42m, the largest penalty imposed by regulator Ofcom, and will have to pay an estimated £300m in compensation to rival telecoms companies over delays installing high-speed internet connections. Ofcom found that BT broke rules put in place to stop Openreach, its subsidiary that controls the UK broadband infrastructure network, abusing its “significant market power” by cutting compensation payments to rivals, blaming installation delays on factors beyond its control when this was not the case. BT said it expected to pay out £300m in compensation to rivals including Sky, Vodafone and TalkTalk for the “serious breach” of Ofcom’s rules. Vodafone, which filed the original complaint, had accused Openreach of failing to meet its 30-day installation guarantee but then reclassifying the delay as having been agreed by rivals which allowed it to avoid paying compensation. Rivals have repeatedly called for Openreach, responsible for building and maintaining the tens of millions of copper and fibre lines that run from telephone exchanges to homes and businesses across the UK, to be split from BT. They argue that BT has dragged its heels in opening the network to their engineers, which has hampered their ability to offer homes superfast broadband access. The record £42m penalty, which was reduced from £60m after BT admitted full liability and agreed to pay back rivals, is more than 11 times greater than the previous largest fine levied on a telecoms operator by Ofcom. Last year, Vodafone was fined £3.7m for taking pay-as-you-go customers’ money without providing a service. BT’s fine is more than seven times that of the second largest penalty handed down, the £5.7m ITV had to pay in 2008 over the “abuse” of premium-rate phone lines in a number of hit shows. GUARDIAN

Minister Javid to end 'feudal' rip-off of home leases, that force new owners to pay spiralling annual “ground rent”
Communities Secretary Sajid Javid criticised the ‘practically feudal practices’ of developers who build new houses and sell them as leasehold, forcing buyers to pay a yearly ground rent. He is now planning a clampdown on the sale of such homes under the Government’s Help to Buy scheme, which offers support to first-time buyers struggling to get on the housing ladder. Under the plans, developers could be banned from selling a leasehold house to a buyer using the taxpayer-backed mortgage scheme. Buyers of leasehold homes do not own the property outright, and have to pay an annual fee to the developer or whoever owns the freehold. Some of these ground rents double every decade, meaning that a fee starting at £250 today would be £500 in ten years, £1,000 in 20 years and £2,000 in 30 years. Developers often flog freeholds on to wealthy investors who are attracted by the lucrative income stream. Families can attempt to buy the freehold, but the owner may then hold them to ransom by demanding a huge premium. The spiralling cost of owning a leasehold home can leave some families struggling to make ends meet. And even if they decide to sell up, the very existence of the punishing ground rent – and the cost of purchasing the freehold – makes it difficult or even impossible to find a buyer. The crisis has sparked a fierce backlash from campaigners, who have warned some families are stuck in their homes. Builders have been selling leasehold houses in recent years as they look to turn a profit, first through the initial sale and then by offloading the freehold to an investor. Mr Javid said he had heard ‘all kinds of horror stories’, including homeowners told they could buy their lease for 30 times the ground rent, ‘only to discover the freehold has been sold to a third party who won’t give it up for less than 100 times the ground rent’. DAILY MAIL

Cycle courier wins holiday pay battle
An employment tribunal has ruled that a self-employed courier for the firm Excel was actually "a worker". Cycle courier Andrew Boxer argued he was entitled to one week of holiday pay based on his work for Excel. The tribunal said his claim was "well-founded" and that the firm "unlawfully failed to pay the claimant". The ruling adds more legal weight to claims that some firms in the so-called gig economy are engaged in "bogus self-employment". Mr Boxer launched his claim for £321.16 after he took a week's holiday in March last year for which he was not paid. He had started working for Excel in September 2013. He signed contracts which referred to him as a "contractor" and "sub-contractor". But the tribunal concluded that his contract did not reflect the reality of his working situation. He argued that while at the firm, he was a "worker" as defined by the Employment Rights Act. Under the act, workers are entitled to basic rights including holiday pay and the national minimum wage. His claim was backed by the Independent Workers Union of Great Britain (IWGB). The tribunal heard that Mr Boxer worked approximately nine hours a day for five days a week. He had no opportunity to negotiate his pay rate or to provide someone else to do work on his behalf. According to the ruling, Mr Boxer was asked by the judge if he had ever queried any of the clauses in his contract. He said: "I had no choice, it would not have made any difference, they would have laughed at me if I had challenged a particular clause." Excel did not produce witness evidence or attend the tribunal hearing. The firm initially offered to pay the claim for holiday pay "without acceptance of the validity of the claimant's claim". That was rejected by Mr Boxer. IWGB General Secretary Dr Jason Moyer-Lee said the tribunal's judgement was "yet further evidence of what we have known to be true all along: courier companies are unlawfully depriving their workers of rights. "As the tribunal dominoes continue to fall we would recommend that courier companies which are not yet subject to litigation by the IWGB urgently get their act together." BBC NEWS

Theresa May threatens cap on energy prices following crackdown on rip-off gas and electricity bills
Firms will face limits on the difference in price between their cheapest and most expensive tariffs under plans that will be finalised within weeks. The Prime Minister said that relying on customers to switch energy suppliers to keep prices down was ‘clearly not working’. Prices had risen 158 per cent over the past 15 years, while the vast majority of consumers were on the most expensive tariffs, Mrs May said. The problem surrounds so-called standard variable tariffs (SVTs), which more than 60 per cent of households sign up to. They are up to £300 a year dearer than the cheapest market deals. Millions who have never switched supplier are on an SVT and those on good value fixed-rate tariffs are automatically switched to an SVT when their deal ends. Mrs May said: ‘Energy is not a luxury, it is a necessity of life... But it is clear to me – and to anyone who looks at it – that the market is not working as it should.’ She added: ‘Our party did not end the inefficient monopolies of the old nationalised energy corporations only to replace them with a system that traps the poorest customers on the worst deals.’ DAILY MAIL

Thames Water hit with record £20m fine for huge sewage leaks
The prolonged leaks led to serious impacts on residents, farmers, and wildlife, killing birds and fish. The fine was for numerous offences in 2013 and 2014 at sewage treatment works at Aylesbury, Didcot, Henley and Little Marlow, and a large sewage pumping station at Littlemore. The Environment Agency (EA), which brought the prosecution, said the enormous volume of untreated sewage discharged was unprecedented – 1.4bn litres – as was the length of time over which the discharges occurred. Justifying the huge fine, Judge Francis Sheridan, said: “It should not be cheaper to offend than to take appropriate precautions.”  Describing the breaches as “wicked” and noting the companies “continual failure to report incidents” and “history of non-compliance”, he said: “One has to get the message across to the shareholders that the environment is to be treasured and protected, and not poisoned.” Water companies have been the most frequent polluters of beaches and rivers in England and past fines were criticised as too low to deter these highly profitable companies that often offended repeatedly. But a change in sentencing guidelines in 2014 is now leading to far heavier penalties. Thames Water, which is the UK’s biggest water company and serves about a quarter of the population, was fined £1m in 2016 for repeated discharges of sewage into the Grand Union canal in Hertfordshire and £380,000 later the same year, after a sewage leak in an area of outstanding natural beauty in the Chilterns. The previous record fine was the £2m penalty imposed on Southern Water in December for flooding beaches in Kent with raw sewage, which left them closed to the public for nine days. The EA called that event “catastrophic” and the judge in the case said the company’s repeat offending was “wholly unacceptable”. The company apologised unreservedly, as it had when fined £200,000 in 2013 for similar offences. Water companies have been frequently criticised for making huge profits and awarding large shareholder dividends while paying little or no corporation tax. In October 2015, the National Audit Office found that an £800m windfall for water companies had not been passed on to consumers. Thames Water made an operating profit of £742m in 2015-16 and paid out £82m in dividends. GUARDIAN

Tesco to pay £129m fine over accounting scandal
The penalties relate to Tesco admitting in 2014 that it had overstated profits by £326m. Tesco is to pay out a total of £235m to settle investigations by the Serious Fraud Office and Financial Conduct Authority into the 2014 accounting scandal that rocked Britain’s biggest retailer. It will pay a fine of £129m. The supermarket group has separately agreed with the FCA to pay about £85m in compensation to investors affected by a trading statement on 29 August 2014 that overstated profits. Tesco will also pay legal costs associated with the agreements and said the total exceptional charge was expected to be £235m. The £129m fine is part of a deferred prosecution agreement (DPA) with the SFO. DPAs, which were introduced in the UK in February 2014, allow a company to suspend a prosecution in return for meeting specified conditions, such as paying a fine and demonstrating that its culture has changed. The agreements between Tesco, the SFO and FCA are not an admittance by the company that it or any of its employees committed a criminal offence. The DPA with Tesco follows a settlement with Rolls-Royce in January that saw the aerospace and defence company agree to pay £671m over allegations that it bribed middlemen around the world between 1989 and 2013. GUARDIAN


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