On election, Cameron said the cuts were temporary, and not ideological. Now he’s saying they’re permanent, and ideological

Chris meets an enthusiastic supporter of the lean state...

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Rip-off News round-up. Our pick of the last week's media (Thu 14th November)

Has Cameron just admitted Austerity is a cover for permanent cuts?

David Cameron said, in his speech at the Lord Mayor's Banquet, that the government is to forge a "leaner, more efficient state" on a permanent basis. He signalled he had no intention of resuming spending once the structural deficit has been eliminated. This is a clear change to claims made after the last general election. In his New Year's message issued on 31 December 2010, he said: "I didn't come into politics to make cuts. Neither did Nick Clegg. But in the end politics is about national interest, not personal political agendas. We're tackling the deficit because we have to – not out of some ideological zeal. This is a government led by people with a practical desire to sort out this country's problems, not by ideology." GUARDIAN DAILY MAIL

Energy customers are not “cash cows”, says Energy Secretary

Lib Dem Energy Secretary Ed Davey said: "Profits cannot come at the expense of the elderly, the vulnerable, and the poorest in our society. Customers are not just cash cows to be squeezed in the pursuit of a higher return for shareholders." He asked the energy firms to open their books to prove they were not just profiteering. But industry body Energy UK complained that a "tit-for-tat Punch and Judy show of insults" was developing. BBC NEWS

UKFI (responsible for our stake in the bailed-out banks) refuses to cut bonuses at RBS and Lloyds

Robin Budenberg, chairman of UKFI, told the Treasury Select Committee that the proposed reductions were not ‘commercially acceptable’ and had stepped in to limit the cuts. RBS and Lloyds were bailed out with £66billion of taxpayers’ money and are now part-owned by the taxpayer. Pay curbs at RBS and Lloyds have limited cash bonuses to a maximum of £2,000. But many have still received handsome share bonuses and long-term performance-related payouts. Last year 95 RBS staff were paid at least £1million, despite the bank slumping to a £5.2billion loss. The equivalent figure at Lloyds was 25. DAILY MAIL

Benefit caps and housing shortage push families from London

Figures show 129% rise in number of families housed by London boroughs outside capital, more than double the same period last year. Figures for the 12 months to June 2013 showed that 789 households were placed in 69 local authority areas outside London, including Manchester, Bedfordshire and Hastings. GUARDIAN

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Bedroom Tax: Cuts to the Spare Room Subsidy (might!) save £470m. But the new Help To Buy subsidy costs £12bn. That means it’s not about cutting the deficit

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The Home Office's GREAT Club helps top foreign business executives avoid...what exactly?

In November 2013 the Home Office launched a GREAT Club. Yes, the capitals in GREAT and C are appropriate - the name of the club is "GREAT Club", as you will see from the Home Office press release below. Clearly the Home Office has access to some really great minds to think up a great name like that. Or have they mispelled GREET, as in greeting visitors to the UK? Or perhaps GREED, as in greedy (see hypothesis below)?.

Anyway, the birth of the GREAT Club was proclaimed in a Home Office press release is:

"the launch of the GREAT Club, an invitation only service providing top business executives with bespoke support from UK Visas and Immigration (UKVI). The Club will start in the New Year as a 12 month pilot aimed at around 100 global business leaders who use the visa service and have strong links to the UK. They will be provided with an account manager to ensure their journey through the visa and immigration service is swift and smooth. The account manager will also be able to arrange visa services tailored to each individual’s needs at no extra cost during the pilot."

Now I suppose the immigration process can be frustrating. But you can be pretty sure that the 100 "top business executives" invited to join the GREAT Club will be well served by their own Personal Assistants, and their Personal Assistants' Personal Assistants (when you get to be PA to a truly top executive you don't have to make your own coffee) to lap up all the tedium and frustration of the visa application process. The Home Secretary won't be finding prospective members to invite into her exclusive GREAT Club sitting on their suitcases in Heathrow.

The reason top business executives shift their businesses to the UK has little to do with how easily they themselves can pass through immigration. It is not to avoid the inconvenience of getting a stamp in their own passports that they hesitate from relocating. However, there are other things they may be more keen on avoiding that may lure them to our shores.

And here we are persuaded to show some sympathy for tax accountants. This is not without precedent - Ripped-off Britons has already been nice to estate agents and to bankers. Now we consider the plight of the tax accountant.

The poor things are getting beaten up by MPs for helping their clients through dodgy-but-legal loopholes. And then they are getting beaten up and severly fined by a High Court Judge for not helping their clients through dodgy-but-legal-at-the-time loopholes.

First, here's the sort of beating they get from MPs from a session of the Public Accounts Committee (PAC) of the UK Parliament looking into tax avoidance schemes. In this session MPs questioned Aidan James, a director of a tax consultancy advising those who want to avoid tax:

Q103 Ian Swales: How many of the schemes you have marketed are now illegal?

Aiden James: Most of them.

Ian Swales: Most of them?

Aiden James: All of them, I suspect.

Q104 Ian Swales: All the schemes you have marketed are now illegal, so you are now looking for the next loophole-is that a fair description of your business?

Aiden James: That is how it works, yes.

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Cameron said 25% of the budget to build the new Universal Credit IT system would go to Small/Medium-sized businesses (SMEs). So far it’s 1%

KJ, Fee and Chris know why...

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Rip-off News round-up. Our pick of the last week's media (Thu 7th November)

More than 5 million people in the UK are paid less than the living wage

The number of those earning below the cost-of-living benchmark has risen 400,000 in a year, with women and the young worst hit. A report for the international tax and auditing firm KPMG also shows that nearly three-quarters of 18-to-21-year-olds now earn below this level. Women are disproportionately stuck on pay below the living wage rate, currently £8.55 in London and £7.45 elsewhere. Some 27% of women are not paid the living wage, compared with 16% of men. Part-time workers are also far more likely to receive low pay than full-time workers, with 43% paid below living-wage rates compared with 12% of full-timers. The charity Save the Children says the number of children living in families with earnings below the living wage has risen from 1.82 million in 2010-11 to 1.96 million in 2011-12. The charity said it was increasingly concerned that 1.7 million households struggling with low incomes would have even lower entitlements under the government’s new universal credit welfare reforms. GUARDIAN

Cable: “Extraordinary anomaly” that foreigners are exempt from paying capital gains tax on second homes

UK citizens typically have to pay capital gains tax - a levy on any profits made when an asset is sold - on non-primary residences, including holiday homes in the UK or overseas and buy-to-let investments. But foreigners are exempt from paying tax on second home transactions. Capital gains tax for high-rate UK taxpayers was raised from 18% to 28% in the 2010 Budget. Mr Cable said it was an "extraordinary anomaly" that UK citizens were liable for the tax but foreigners were not. BBC NEWS

The middle class debt meltdown: Toll of wealthy professionals in financial trouble rockets by a quarter in four years

The middle classes are plunging into debt problems faster than any other social group – and it will only get worse when interest rates rise. A leading debt recovery agency, Capquest, has revealed a staggering 25% surge in the past four years among more affluent people ending up on its books, including professionals and property owners. Both Citizens Advice and the Financial Ombudsman Service said they have been shocked by the rise in middle class families in difficulty. Citizens Advice chief executive Gillian Guy said: ‘The squeezed middle are finding that they can’t keep on top of their financial commitments... As employment floundered, workers were forced to take jobs that paid less and they’ve been unable to reverse that trend.’ Unsecured consumer debt is running at an estimated £322bn, and rising. DAILY MAIL

HS2 report overstated benefits by six to eight times

A KPMG report claimed the high-speed rail project would bring £15bn in additional benefits to the UK. But the findings, widely cited by the government used a method for estimating this figure that was "essentially made up", said Henry Overman, professor of economic geography at the LSE. Overman was an adviser to HS2 Ltd until 2012. Earlier, the KMPG partners who produced the report defended their work to MPs as robust, but admitted it was produced over four months for a total fee of £242,000. Committee chair Andrew Tyrie asked: "You don't normally do work of this scale for a couple of hundred thousand do you?" KPMG's Richard Threlfall replied: "We didn't quite anticipate the degree of debate the report would create." GUARDIAN

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The cost of infrastructure: Big Corporate has become the government's tax collector

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Graphs at a glance: Tax Freedom Day, over the last 50 years the tax burden under Labour has been lower (gasp!) than under the Tories

It is commonly assumed that the Labour Party is more into taxing us than the Conservatives. Perhaps it is down to assumptions about redistributing wealth and maintaining public services - Labour assumed to want more, Tories assumed to want less.

The raw data shows something different.

According to figures compiled by the Adam Smith Institute, taking the average over the last 50 years the nation has had to work 11 days longer to pay off our taxes under Tory governments than Labour! Crumbs!


I wonder how that could be?

Graph updated to include 2015

"Tax Freedom Day" calculates all the taxes taken by the government as a percentage of net national income, and then applies that percentage to the calendar year. It purports to give an indication of how long all our nation has to work to pay all the taxes, after which we are working for ourselves.

[We are grateful to @Zenarchy1 for bringing this data compiled by the Adam Smith Institute (who promote libertarian and free-market ideals, so not likely to bend the statistics to favour the left) to our attention].

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Both Cameron and Miliband promise to stop billions in corporate rip-offs. Oh yeah?

Fee, Chris and KJ try not to forget the oldest marketing trick in the book...

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Rip-off News round-up. Our pick of the last week's media (Thu 31st October)

What recovery? Households are no better off than during recession as incomes flatline and essential costs soar

Confirming what cash-strapped families have known for some time, the Office for National Statistics reported that real household disposable income has changed little since 2009, despite cumulative real GDP growth of 4.2% since then. Meanwhile, the cost of essentials such as housing, energy and water has soared. The definition of “real household disposable income” is the money households have left over after tax and benefits, adjusted to take into account inflation. The ONS said that the share of this money families spend on basic essentials has jumped from 19.9% in 2003 to 27.3% in 2013. Most of that squeeze is accounted for by housing, which now takes up 20.6% of disposable income compared to 14.7% ten years ago. The share taken up by gas and electricity has jumped 72% in ten years, despite us not using any more than we used to. DAILY MAIL

Energy firms 'overcharge by £3.7bn a year'

Some of Britain's biggest energy companies have been accused of raising households bills for no reason and systematically overcharging customers by £3.7bn a year, as they were grilled by MPs over their soaring prices and profits. The Big Six energy firms were also challenged by Stephen Fitzpatrick, the chief executive of small supplier Ovo Energy. As part of his evidence, he said: "When a customer calls their supplier and says I'm going to leave, they say hold on a moment, we've just found out we can save you £160. British Gas seems to be the most active, with a dedicated win-back team whose sole job it is to call people up and there's a terrible mistake, we've been overcharging you all this time and now we can cut your bill. When this kind of behaviour is allowed to go unchallenged, this ex-monopoly advantage by the Big Six goes unchallenged by Ofgem, we'll never get effective competition." GUARDIAN

British Gas rakes in £20m profit from overestimated bills, says whistleblower

A whistleblower said that £20m-worth of "credit balances" was put into the annual accounts of British Gas in one recent financial year. Under the current system, energy companies can estimate customers' future usage and charge accordingly. If less energy is used han was estimated, credit is built up which can be reclaimed or used to offset higher-than-expected future bills. However, if the customers change supplier and leaves, the existing supplier is supposed to return the credit; British Gas appears to have kept the money for themselves. GUARDIAN

HMRC’s £35bn estimate of tax dodging is 'tip of the iceberg'

HM Revenue & Customs is failing to make Google, Amazon and others pay up, says Margaret Hodge, chair of the MPs' public accounts committee. The committee accused HMRC of being too cosy with the tax dodging industry. Edward Troup, tax assurance commissioner at HMRC, was then asked if he really once wrote an article which said: "Taxation is legalised extortion." He confirmed that he had written it but said that it was in the 1990s. GUARDIAN

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