Boris Johnson attacks firms that rely on tax credits to top up and subsidise low pay

SOURCE DAILY MAIL: Boris warns Cameron and Osborne against 'hacking back' tax credits until firms start paying their workers more

The London Mayor said it was 'scandalous' that private companies were paying their workers so poorly that the government needed to top up their wages with tax credits. He warned the Chancellor not to used next month's budget to begin 'hacking back' in-work benefits while pay was still so low. Mr Johnson's warning shot comes after the Prime Minister used a speech this week to attack the spiralling cost of tax credits – and accused giant firms of using the benefits system to hold down wages. A study by Citizens UK this year showed that there were 5.2million low paid workers in the UK, receiving £11billion in state support. It is argued that if their firms paid them the Living Wage instead of the minimum wage it would save the taxpayer £6.7billion in benefits. Five of the country's biggest retailers – Tesco, Asda, Sainsbury's, Morrison's and Next – reportedly receive £1billion-a-year in taxpayer-funded subsidies for their wages bill. Mr Johnson is backing the Living Wage campaign, where firms volunteer to pay staff more than just the legal minimum. He said:  'It is quite interesting how this movement is building. When I started as mayor there were about 23 companies and organisations who were paying the living wage, it's now up to about 617 – it's massively grown... It puts tens of millions of pounds into the pockets of people who need it. It's a wonderful, wonderful thing.'

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Fake supermarket “deals” end up costing us shoppers hundreds of millions more

Fee, KJ and Chris shop for answers...

SOURCE GUARDIAN: UK supermarket “deals” dupe shoppers out of hundreds of millions, says Which?

The consumer group Which? claims supermarkets are pushing illusory savings and fooling shoppers into choosing products they might not have bought if they knew the full facts. Examples raised by Which? include Tesco flagging the “special value” of a sweetcorn sixpack when a smaller pack was proportionately cheaper, and Asda raising the individual price of a product in order to make the multi-buy deal more attractive. The cumulative impact of all these different pricing tactics is that it is impossible for people to know if they are getting a fair deal, the consumer group says, particularly when prices vary frequently, consumers are in a hurry or are buying numerous low value items. About 40% of groceries in Britain are currently sold on promotion, according to the retail analysts Kantar Worldpanel. With £115bn spent on groceries and toiletries in 2013, Which? said consumers could be collectively losing out to the tune of hundreds of millions of pounds. This is the first ever super-complaint Which? has lodged against the grocery sector after compiling a dossier of “dodgy multi-buys, shrinking products and baffling sales offers” and sending it to the Competition and Markets Authority. Which? has previously made super-complaints on care homes, credit card interest rates, Northern Ireland banking, private dentistry and the Scottish legal profession.

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Potentially lethal food poisoning bacteria in 70% of supermarket chickens? That's not the big story...

Fee explains the real story to KJ...

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Tesco fined £6.5m for fixing milk and cheese prices

Fee, Chris and KJ hope that's the end of the matter...

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Horse meat scandal: cuts have weakened food standards enforcement system

It takes a prime minister to turn this one around...

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Tesco beef burgers found to contain 29% horse meat

Chris is suspicious...

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Supermarket sales tactics may be rip-offs, but they are legal says the Office of Fair Trading

In January 2012 the Office of Fair Trading (OFT) launched an investigation on “Retail food pricing and promotional practices”. The investigation was closed on 30^th November 2012, when  the OFT courageously announced

“The OFT has made no finding that the supermarkets have breached the law or were engaging in misleading promotional practices.”

That the supermarkets did not breach the law is not a surprise. British consumer protection law in the form of the “Consumer Protection from Unfair Trading Regulations” is a charter for rip-offs. The law explicitly states that deception is perfectly legal so long as it only deceives the less than average consumer. 


Incredibly it is also explicitly legal under this law for a trader to knowingly engage “in a commercial practice which contravenes the requirements of professional diligence” so long as his actions are not “likely to materially distort the economic behaviour of the average consumer with regard to the product under regulation”.  Blimey! 

But while the law only protects the more than average half of Britons, the Office of Fair Trading provides detailed guidance so even the most brutishly stupid retailer will understand how to skirt around consumer protection law if he is so inclined. A kind of 'no retailer left behind' scam tutorial.

To help the dimmer retailers OFT's guidance provides pictures to make sure retailers don't need a moral compass to navigate the law. The law identifies 31 practices that are banned under all circumstance. But apart from those 31, anything goes so long as it only hits the 'less than average'.

Although the above graphic from the OFT's "Guidance on  the Consumer  Protection from Unfair Trading  Regulations  2008" states that it is "Unfair if they cause consumers to take a different decision", the law itself clarifies that this only protects the "average" consumer as stated in these extracts from the legislation: 

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Food waste and the seven deadly sins

The gang discuss ways to make Britons waste less food

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Supermarket price promises really are a lottery!

Chris and his wife try and find the best bargains while shopping in a supermarket

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Every Lidl helps

How to save money on your shopping budget

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Coalition cocktails

The gang check out the government guide on drinking alcohol

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Fairtrade - the good reason, and the real reason

“A man always has two reasons for doing anything: a good reason and the real reason.” 

J. P. Morgan (1837-1913), banker

Fairtrade products cost more. But what happens to that extra you pay to be Fair? The supermarkets want you to think it goes like this:

You don’t have to be a bleeding heart to believe in fair trade. Fair trade isn’t in itself just about charitable giving. Of course, charity can be an element in any decision. An OFGEM survey on why people swapped energy supplier showed 9% of switchers over 65 years old did so in part because they wanted to do the salesman a favour. Even the Fairtrade Foundation states that its mission is not just about charity – it is about being Fair. But what does “Fair” mean? Does it mean it pays enough for a farmer to bring up and educate his family in good health regardless of the value the market puts on his produce? Or does it mean ensuring the farmer doesn’t get ripped-off by local agents, wholesalers and supermarkets? All that debate is important and is complicated, but not central to the subject of getting more cash to the farmers. For ordinary Fairtrade buying Britons, it is principally about getting more money to the farmers for whatever reason, just as Free-Range is about getting better conditions for chickens. If that motivates you, then you should be pretty grumpy about what is actually going on. Even if you don’t care much about our rural brethren, be they animal or vegetable, conscience driven products are easing food prices up in the UK marketplace. With about half of all eggs sold being free-range, barn or organically raised, and a fifth of all coffee and bananas being Fairtrade certified you are paying extra whatever the state of your conscience. When you know where all the extra pennies and pounds you are paying go to, regardless of your “Fair” sympathies, then you may sit less easily of a morning in your cotton pyjamas, downing your scrambled eggs and coffee whatever their origin.

Take the coffee industry as an example. Fairtrade promises farmers a minimum price for their coffee. When the price falls beneath this level, farmers on the Fairtrade scheme get paid the ‘Fairtrade Minimum Price’. When the market price is higher, they get paid that higher price. The pact with the consumer is that you pay more not for the flavour, the quantity, the quality, nor the environment, but you pay more for the farmer. And many consumers are willing to sign up to this pact, as can be seen from the supermarket shelf space allocated to Fairtrade Coffee. Going from a few token bottles just a few years ago, Fairtrade now fills up to half the instant coffee shelf space in some supermarkets. In February 2011, the price of Tesco’s own brand 100g bottles of instant coffee were £1.69 for “Gold” and £2.73 for “Fair Trade”. A difference of £1.04.

So if that extra pound is going to the farmer, then it’s money well spent. Isn’t it?

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Cheesed off by supermarket tactics

Fee educates Chris on the perils of bulk-buying

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