Thursday 18 May 2017

Rip-off News round-up. Our pick of the last week's media (Thu 18th May)

Jeremy Hunt quizzed over why nurses are using foodbanks
The Health Secretary was interviewed on the BBC's Andrew Marr Show after Theresa May said last week there "many complex reasons" why nurses are increasingly turning to the charitable centres. It comes after the Royal College of Nursing claimed that nurses are seeking debt advice and increasingly turning to food banks. Mr Hunt said: "The minimum a nurse can be paid in this country is £22,000 - £27,000 in inner London. The average pay was £31,000. Is that enough considering the brilliant work that they do? I think many people would say they want to pay them more. I think they do an incredible job.” Nurses have had seven years of pay freezes. Mr Hunt also acknowledged that failure to hit A&E targets was "not acceptable" during Sunday morning's show, but insisted that the Tories were increasing funding and recruiting more doctors and nurses. A separate target is for 92% of patients to be treated within 18 weeks of referral by their GP. But the NHS has not hit this target since February 2016 and performance has been slipping since then. Insisting that focusing on the targets was not a "fair reflection of the performance of the NHS" he said: "Just before the election was called, at the end of March, the NHS published an independent report in which they said that if you take most major conditions - heart attack, stroke, cancer, so on - outcomes have dramatically improved over the last five years." EVENING STANDARD

Germany admitted that crippling austerity measures would destroy Greece, claims former Greek finance minister
In his new memoir, Greece's former finance minister Yanis Varoufakis claims German finance minister Wolfgang Schauble candidly admitted to him that he would not have endorsed an EU-ordered austerity plan. In one exchange he said he asked Schauble whether he would sign up to the EU's austerity measures, to which his German counterpart responded: 'As a patriot, no. It's bad for your people.' The former Greek finance minister claims to have secretly recorded his conversations with top figures, and says his experience showed how far Germany was willing to go to protect the single currency. During one of these conversations, he said former US president Barack Obama agreed that 'austerity sucks', but said he could do nothing to influence Germany. In his new book, The Telegraph reports, the former Greek finance minister claims Germany blocked a Chinese rescue deal for Greece. He also warned British Prime Minister Theresa May not to expect the EU to play fair during Brexit negotiations. DAILY MAIL

New free schools funding system 'incoherent' and offers poor value for taxpayers' money, PAC warns
The Department for Education is spending “well over the odds” in its bid to create 500 more free schools, while local authority buildings crumble, the House of Commons Public Accounts Committee (PAC) warned. In a damning new report, the committee criticised the Government's focus on free schools, which it said were sometimes opened in areas with no shortage of places for pupils while existing schools struggle to make ends meet. The cross-party board also noted that each pupil place in a new free secondary school “costs 51 per cent more than places provided by local authorities”.  This was largely due to the high cost of land, which the DfE was found to be paying almost 20 per cent over official valuations for. Listening to evidence at the PAC hearing, MPs heard how one school was being forced to make two staff redundancies as a result of being unable to fund building maintenance costs. It was also noted that some 85 per cent of schools are known to have asbestos. The only way to address this would be to completely rebuild the schools at a total cost of £100bn. Analysing the report’s findings, the Institute for Fiscal Studies (IFS) said: “The outgoing government committed to freezing school spending per pupil in cash-terms up to 2019–20. This implies a real-terms cut in spending per pupil of about 6.5 per cent between 2015-16 and 2019–20.” The IFS added: “We haven’t had a proper funding formula since the early 2000s, which has allowed various inequities across areas to develop, which will only grow if left unaddressed.” The committee added that the Government's pledge to create 500 free schools - including some grammars - by 2020 involved spending “significant funds”, even in areas with no shortage of pupil places at a time when existing schools “struggle to live within their budgets and carry out routine maintenance”. INDEPENDENT

£10.50 a call?! Ofcom opens investigation into the cost of 118 calls
The regulator will examine directory enquiries numbers, which begin with 118, after some providers were found to be charging up to £10.50 a call. It will also look at 070 numbers, which allow users to be contacted on any phone at any location, and can cost up to £3.40 a minute. The telecoms regulator said prices should be "transparent and fair". Ofcom, which raised its concerns last week, said there were now more than 400 directory enquiry services offering a variety of options and prices, with call costs ranging from 35p per call to £10.50. However, there is no stipulated cap on such charges, meaning operators are free to charge up to a maximum of £23.97 for calls of less than a minute. Ofcom said it knew of one client who had received a £150 bill for calling a 118 number. Meanwhile Ofcom said it was aware of one consumer who called directory enquiries in 2009, and ended up with a bill for £350. When directory enquiries was deregulated in 2003, calls to BT's 192 service cost just 40p. BBC NEWS

HMRC steps up inquiry into employment status of Hermes couriers
HM Revenue & Customs has stepped up its investigation into the delivery company Hermes classifiying its couriers as self-employed, while the business has also been hit with an employment rights lawsuit from the GMB trade union. Drivers for Hermes were sent letters from HMRC over the weekend asking them to provide evidence as the tax authority looks into their employment status. In the letter, seen by the Guardian, HMRC requests that the drivers disclose information such as their written contract and payslips, and agree to a one-hour interview. “This will help us decide what your employment status is/was,” it says. HMRC’s investigation follows one by the Guardian that found some self-employed couriers were being paid less than the “national living wage”, in an arrangement the company said had been approved by HMRC. Separately, GMB has filed a lawsuit challenging Hermes over employment conditions for its couriers, vowing to battle “bogus self-employment and gig economy exploitation”. Maria Ludkin, the GMB’s legal director, said: “Under the false claims of ‘flexibility’, Hermes seems to think it’s acceptable to wriggle out of treating its workers with respect. “Guaranteed hours, sick pay, pension contributions – these aren’t privileges to be bestowed when companies feel like it; they are the legal right of all UK workers. The union won a similar case against Uber last year, resulting in a ruling that the ride-hailing service should pay the minimum wage and grant drivers holiday pay and other benefits. Uber is contesting the ruling at the employment appeal tribunal. As well as Uber and Hermes, takeaway food delivery service Deliveroo has come under pressure from workers seeking improved conditions. The company was accused of “creating vocabulary” last month, after issuing managers with a list of words to ensure it did not accidentally use terms that indicated its motorbike riders and cyclists were employees. GUARDIAN

AstraZeneca shareholders revolt over chief executive's £13m pay
Nearly 39% of investors voted against the pharmaceutical group’s 2016 remuneration report at its annual meeting in London, similar to the rebellion it faced three years ago. Support for the new pay policy was much stronger, with 96% of investors backing it. AstraZeneca’s chief executive, Pascal Soriot, received a total pay package of £13.4m last year because a long-term incentive plan and other rewards paid out. He was paid an annual salary of £1.2m and an annual bonus of £1.2m, down from £2m the previous year. But he pocketed a further £6.9m from a long-term incentive plan, plus a one-off payment of £3.6m in compensation for bonuses he lost when he left his previous employer. Royal London Asset Management, which holds 1% of AstraZeneca shares, said it voted against the remuneration report and the chair of the remuneration committee, but backed the new pay policy. Two advisory groups, PIRC and Institutional Shareholder Services, had urged shareholders to vote against the remuneration report and policy. PIRC described the £6.9m long-term incentive plan payment as “excessive”. The housebuilding firm Persimmon suffered a near 10% protest vote over executive pay on Thursday, while Crest Nicholson has pushed ahead with plans to pay out controversial bonuses, even though more than 58% of shareholders rejected its remuneration report last month in a non-binding vote. GUARDIAN

UK pay growth outlook is 'among gloomiest in advanced economies'
The prospects for pay growth in the UK are among the gloomiest in advanced economies, with only Greece, Italy and Austria forecast to suffer bigger falls in real wages by the end of 2018, according to a TUC analysis. The trades union group said UK real wages – pay adjusted for the effects of inflation – were on course to fall by 0.5% between the start of 2016 and the close of 2018, based on forecasts from the Organisation for Economic Co-operation and Development. In contrast, real wages were predicted to rise in most of the other 31 countries analysed. The average rate of real pay growth for those 31 countries was 2.6% between 2016 and 2018. Workers suffered years of declining real wages in the wake of the financial crisis. After a two-and-a-half-year period of respite, pay recently started falling again in real terms. That drop is the result of sluggish pay growth being overtaken by inflation, which has risen as the pound’s weakness since the Brexit vote makes imports more expensive. Higher oil prices have also raised inflation. The TUC said UK real wages will be 6.8% lower in 2018 than they were in 2007 before the financial crisis, according to OECD predictions. Only Italy and Greece will have suffered bigger falls, of 7.3% and 25.2%, respectively. GUARDIAN

The risky loans that let drivers on minimum wage buy a £19,000 sports car and could be fuelling a debt crisis
Every day, flashy cars are being snapped up by motorists on modest incomes. Our investigation found that drivers earning as little as £8,200 a year can walk away with a brand new £12,500 Ford Fiesta, Britain's most popular car. You would need to earn just £13,500 to be able to afford a Mazda MX-5 — a flashy Japanese two-seater sports car that's worth roughly £19,000. You'd need a salary of £20,000 to buy an Audi TT, which starts at £28,500; while a Range Rover Sport, a £60,000 luxury 4x4 off-roader, requires an income of £41,000 a year, according to figures from car finance broker No wonder car sales are soaring in Britain. Indeed, dealerships shifted a record 2.7 million new cars last year — the fifth consecutive year of rising sales. According to the Finance and Leasing Association, some 320,000 new and used vehicles were acquired through some form of finance in March — £3.6billion worth of new cars and £1.4billion worth of second-hand motors. Fuelling the boom is a relatively new type of finance called Personal Contract Purchase (PCP) — a type of lease agreement that dramatically cuts the monthly cost of owning a car. As many as nine in ten new cars bought on finance are done so using PCP deals — £160 million in loans a day. But fears are now growing that PCPs are luring millions of drivers into taking on too much debt. So rapid has been the growth of PCP finance that the City watchdog is concerned that some customers are being sold complex deals they do not understand. It has launched an investigation. Once the money has been loaned, many car finance firms package up the debt to flog to investors — a chilling echo of the U.S. sub-prime mortgage crisis of 2007. Last year, finance firms packaged and sold £6.7 billion-worth of car loans — more than double the year before. Experts say that while a car finance bubble bursting would not have the same devastating impact on the economy, it could still cause significant damage. DAILY MAIL

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