Writing off student
debt can cost £10bn, not £100bn, says IFS
The figures are well below the £100bn quoted by the
universities minister, Jo Johnson, and other members of the government this
year as they sought to push back against suggestions by the Labour leader,
Jeremy Corbyn, that his party would end tuition fees and “deal with” existing
student debts. As the IFS pointed out, the £100bn is the total for all
student loans, including those for maintenance, for students from outside
England, and for those incurred after fees were introduced in 1998 but before
they were raised to £9,000 a year in 2012. If only post-2012 debt for tuition
for students from England was scrapped, the policy would increase government
debt by around 1% of national income by 2050, or around £20bn in today’s terms.
The IFS also calculated that delaying the decision until the end of the current
parliament in 2022 would raise that bill from £20bn to £60bn. A cheaper
alternative would be to write off tuition fee debt above the £3,465 level of
undergraduate fees charged before 2012 – which would add £10bn to government
debt. The analysis also cautioned that the main beneficiaries of wiping out the
debts would be high-earning graduates, given that they pay back a higher
percentage of their loans than other graduates. That is because student loan
debt that is not repaid after 30 years (i.e. by low-earning graduates) is anyway
going to be forgiven. Therefore the government could pay for the additional
debt with a “modest increase” in the top rate of income tax, the IFS suggested.
Earlier this year the IFS calculated that young people from the poorest 40% of
families entering university in England for the first time this year will
emerge with average debts of around £57,000. GUARDIAN
One in ten British
adults now a second-home owner, leaving millions of properties empty
The figures published by the Resolution Foundation show that
the number of people with multiple properties rose from 1.6m to 5.2m between
2000 and 2014 - a 30 per cent increase in the proportion of adults who owned
more than one home. The analysis also suggested that most of these owners are
not landlords, with just 3.4 per cent of adults letting property out. This
would mean that 6.6 per cent of adults, or 3.4m people, have extra properties
that they leave empty as an investment or use as holiday homes. Laura Gardiner,
senior policy analyst at the Resolution Foundation, said that properties not
being used for rental could include "holiday homes, flats that adult kids
live in for free, empty properties they’re speculating on, MP’s with London
flats and constituency houses, people who’ve inherited their recently deceased
parent’s home and haven’t worked out what to do with it yet". The
think-tank examined data from the British Household Panel Survey and the Office
for National Statistics to find that while overall home-ownership has
plummeted, second home-ownership has risen dramatically. The proportion of
adults owning any property rose to a high of almost 66 per cent in 2002 but has
since fallen to just over 60 per cent. The majority of those owning second or
third homes were based in the wealthiest areas of the UK, the report added. Almost
six in ten landlords are based in the South East or South West, the East of
England and London. "This is where the young people are struggling to get
on to the property ladder which is why towns are banning holiday homes," said
Paula Higgins, of pressure group the Homeowners Alliance. "These people
have had years and years of benefit from a rising housing market - but you
shouldn't be making more money off your house than you do from going to
work." Last year the Cornish town of St Ives voted to ban the building of
second homes. The town, dubbed Kensington-on-Sea because of its popularity with
well-heeled west Londoners, held a referendum last May after figures revealed
that one in four new properties were being used as second homes. TELEGRAPH
Majority believe
public sector pay cap has been unjustifiable and now is the time to end it, new
poll says
Asked about the restraints on public sector pay since 2010,
51 per cent of those polled said they have been unjustified while just 26 per
cent said the Government had been justified in using the austerity measures. A
larger majority – 62 per cent – said now is the “right time” to lift the
restraints on workers’ pay in the public sector with just 14 per cent agreeing
with the statement “it is not the right time”. But the poll also highlights
that the Prime Minister has limited political capital to gain from lifting the
cap, with more people interpreting the end of the contentious policy as a
victory for the Labour leader. Downing Street said earlier this week that the
seven-year public sector pay cap is to be scrapped, unveiling a 1.7 per cent
hike for prison officers and improvements totalling 2 per cent in policy pay
for 2017-18. It is expected that ministers will announce further rises for
other workers in the public sector at the Chancellor’s Budget in November. INDEPENDENT
National Audit Office
points finger at Government welfare reforms over steep rise in homelessness
The latest report by the National Audit Office (NAO) on
homelessness states that the number of households living in temporary accommodation
in England has increased by 60 per cent — to 77,240 — in the six years since
March 2011. These households now contained 120,540 children: an increase of 73
per cent in the same period. Since 2011, the Department for Work and Pensions
has introduced a series of welfare reforms designed to reduce overall welfare
spending and provide incentives for benefit recipients to take up employment.
This included lowering the benefit cap on household incomes. “At the same
time,” the NAO says, “rents in the private rented sector in much of the country
— London in particular — have increased faster than wage growth. All of these
factors appear to have contributed to private rented properties becoming less
affordable, which in turn is likely to be contributing to homelessness caused
by the ending of an assured shorthold tenancy.” The proportion of households
accepted as homeless by local authorities “due to the end of an assured
shorthold tenancy” increased from 11 per cent in 2010 to 32 per cent this year,
it says. In London, the proportion rose from ten per cent to 39 per cent. In
the mean time, the number of households placed in temporary accommodation over
the border in another local authority that recorded them as homeless increased
by 248 per cent to 21,950. Homelessness, defined as having no accommodation or
being unable to continue to occupy any given accommodation, currently costs the
public sector £1.1 billion a year. More than three-quarters of this (£845
million) was spent on temporary accommodation last year, of which
three-quarters (£638 million) was funded by housing benefit. The NAO also
counted 4134 rough sleepers on a single night last autumn: 134 per cent higher
than a similar count in autumn 2010. The charity Housing Justice said: “...there
is a pragmatic reason for rethinking the underlying policy drivers here,
Homelessness costs the taxpayer £1 billion a year, the government has been
cutting housing benefit only to fund more expensive temporary accommodation
further down the line. Not only does this fail to deliver cost effectiveness
for the taxpayer it also creates chaos and misery in the lives of thousands of
people forced in to homelessness.” CHURCH TIMES
Universal Credit wait
a key factor in rent arrears, says DWP report
New figures published by the Department for Work and
Pensions showed that around one in four new claimants waited longer than six
weeks to be paid. Of those Universal Credit claimants who fell into arrears on
their rent, the majority said it was the first time they had fallen behind on
their payments in their current accommodation. Earlier in the week, Citizens
Advice said its research showed that those under the Universal Credit system
were more likely to struggle with priority debts. The publications, ahead of a
major acceleration in the roll-out of Universal Credit, has prompted debate
among MPs and calls for a rethink. Labour said the system was in "total
disarray", while Tory MP Heidi Allen told the BBC that the government
"should slow down a little bit and get it right". Universal Credit
combines existing benefits such as tax credits, housing benefit, income
support, Jobseeker's Allowance, and employment and support allowance. By 2022,
more than seven million households will receive Universal Credit - at least
half of which will be in work. A major rollout of the scheme begins soon,
following a series of delays. The system was originally scheduled to be fully
in place this year. Citizens Advice is calling for a suspension in the
roll-out. But the government said monthly payments reflected the way many
working people were paid. BBC NEWS
'Digital-token
investors should brace for total loss' says FCA
The City regulator, the Financial Conduct Authority (FCA)
has warned consumers of the dangers of investing in digital tokens issued by
firms. So-called initial coin offerings can raise millions of dollars for firms
and consumers can make a gain if the new crypto-currencies then go up in value.
But the FCA says investors also stand to lose their entire stake in the
high-risk investments. In an initial coin offering (ICO), a firm sells digital
tokens, or "coins". These are often in exchange for a more
established crypto-currency such as Bitcoin or Ethereum. The new coins issued
by the firms can represent a voucher for some kind of future services, or a
share in the firm, or they may simply have no discernible value at all, the FCA
said. For example, Wild Crypto, an online gambling business which is developing
a crypto-currency lottery, sold almost 34 million "Wild coins" to
investors. Consumers got no stake in its operations for their cash, but
invested in the hope that the Wild coin lottery tokens would take off in
popularity. Companies can raise many millions of dollars in this way. US
identity verification firm Civic recently raised $33m (£26m), while blockchain
technology firms Bancor and Tezos raised more than $350m. Regulators around the
world are becoming increasingly concerned with the popularity of ICOs. Last
week China banned initial coin offerings, calling them "illegal fundraising".
In July the US Securities and Exchange Commission warned of the risks of ICOs,
and regulators in Singapore, Hong Kong and Canada have also pointed out some of
the dangers. BBC NEWS
PR company Bell
Pottinger collapses following claims it ran a 'racially divisive' campaign in
South Africa
Disgraced public relations company Bell Pottinger has
collapsed after it failed to find a buyer to save it from administration, in
the most spectacular fall from grace ever to hit the industry. The firm
collapsed after it orchestrated a ‘fake news’ campaign on behalf of the Gupta
family, one of South Africa’s wealthiest dynasties. Lord Bell, who is famed for
his willingness to represent dictators such as the late Chilean leader General
Pinochet, admitted he was instrumental in bringing in a lucrative
£100,000-a-month contract from a company called Oakbay, controlled by the
Guptas. Bell Pottinger fanned flames of outrage when it embarked upon a
campaign to divert attention from the Guptas’ ties with South African president
Jacob Zuma. To do so, it branded the president’s opponents as the agents of
‘white monopoly capital’, despite the fact these included other big Bell
Pottinger clients such as luxury goods giant Richemont. Industry body the
Public Relations and Communications Association expelled Bell Pottinger for at
least five years, saying its actions were likely to inflame racial discord. Henderson
said this weekend he plans to start again in the PR business once the dust has
settled. Lord Bell, who is accused by his enemies of conniving in the downfall
of his former company, said he will not receive any more instalments on the
seven-figure payment he agreed when he left the firm. About 270 employees will
lose their jobs. One consultant said: ‘There are a lot of young people working
here who are entirely blameless and now have an uncertain future.’ DAILY MAIL
Social media stars
face crackdown over money from brands
Instagram’s popularity with young people, and women in
particular – in April it reported 700 million members – has led to a roaring
trade between marketers and so-called influencers with large and engaged
followings. Members of the Kardashian family, who promote a range of products
from “detox” tea to waist-training corsets to their tens of millions of
followers, can reportedly command as much as $500,000 (£370,000) per post. But
even lower-profile celebrities can make a profit from the photo-sharing app
owned by Facebook. Elizabeth Olsen, who plays an influencer in the forthcoming
film Ingrid Goes West, has attracted 745,000 followers since she joined
Instagram for the first time in May, telling the LA Times: “Financially, it’s a
brilliant opportunity. I was only hurting my opportunities by not
participating.” With many paid-for promotions not disclosed, the blurry line
between advertisements and heartfelt recommendations has led consumer
protection bodies to take action against influencers for pushing brands they
have received payment from. In the UK, influencers have had to identify
advertisements with the hashtags “#ad” or “#spon” (sponsored) since 2014. In
April, the UK’s Advertising Standards Authority (ASA) found the makeup blogger
Sheikhbeauty to have breached the CAP Code for non-broadcast advertisements by
failing to clearly label a post about a herbal detox tea brand as an
advertisement. This week the ASA ordered the reality television personality
Sophie Kasaei to remove her own photo of the Flat Tummy Tea she had shared with
her 1 million-plus followers in March. Last week the US Federal Trade
Commission (FTC) asked a number of high profile social media influencers to
clarify specific posts that had been identified as potentially non-compliant
with their rules. Reuters reported that the models Naomi Campbell and Amber
Rose and actors Lindsay Lohan, Vanessa Hudgens and Sofia Vergara were on the
FTC list. Analysis of the 50 most-followed celebrities on Instagram by the US
marketing firm Mediakix in May found that 93% of posts promoting a brand were
not compliant with the FTC guidelines. GUARDIAN
