Graphs at a glance: Data shows how successive governments, both left and right, have enriched a tiny minority at the expense of almost everyone.

The 2014 European election result was shaped by the anger of ordinary people who have been misused to pay the price of the banking crisis. In the UK the Tories threw them out of the basket, the LibDems assisted with a sheepish smile, and Labour promised that if they were in power they would be doing the same thing in any case. 

The banking sector continues to be caught up in scandal after scandal, with no sign of reform or retribution beyond piffling fines. Other sectors, such as the energy industry, chase the banks’ scandalous profit levels by inflicting excessive prices on consumers. 

According to the Sunday Times Rich List the richest 1,000 people have doubled their fortunes since the financial crash. While in the name of ‘Austerity’ the incomes of the 90% have been frozen or cut, and the prospect of retirement has been pushed further into the distance with less money.

Actually, it isn't just the 90% who have been screwed. Figures from the Paris School of Economics, giving the share of national income going to different groups, do show that the top 10% did very well in the 5 years leading to the 2008 crash. But dig a little deeper and you find some surprising figures.

The enrichment of the top 10% masks 

• how exceedingly well the top 0.05% have done, 
• how really well the top 0.1% to 0.05% have done, 
• how rather well the top 0.5% to 0.1% have done.
• how really badly the top 10% to 5% did.

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OFGEM to investigate British Gas for paying salesmen bonuses for inflating business customers’ bills

Including the Royal British Legion! KJ learns more from his mate, a British Gas salesman...

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Rip-off News round-up. Our pick of the last week's media (Thu 29th May)

Back to the drawing board: Duncan Smith’s Universal Credit redefined as 'new project' after successive delays

Universal credit, the government's recasting of the welfare benefits system, has had to be reorganised so fundamentally that the government watchdog responsible for grading its implementation has judged that it is now an entirely new project. In its annual assessment of the implementation of nearly 200 major infrastructure projects, the Major Projects Authority (MPA) has listed universal credit as "reset", the only one to be listed as going back to the drawing board. The scheme has been dogged with IT design faults, leading to successive delays. Universal credit is the flagship project of Iain Duncan Smith's Department for Work and Pensions (DWP). Ministers started implementing it three years ago, and have been criticised by successive watchdogs for failing to come clean about the problems the DWP has experienced with the technology. GUARDIAN

British Gas salesmen who double your bills 'were treated like celebrities and given free helicopter rides for ripping off customers'

British Gas paid staff bonuses for inflating business customers’ bills – and churches and charities were targeted because they had fewer resources to shop around. Employees who made the highest profits by ensuring customers were sold the most expensive deals possible were sent on holidays to places such as Monaco, Rome and Iceland. Employees selling gas at base price for a one-year contract earn £18, but if they double costs to 5.5p per unit over three years they earn £435. Their food and drink was paid for and often they were given spending money. Other rewards included vouchers, 3D TVs, laptops, theatre tickets and PlayStations. A whistleblower who won a holiday said: ‘You were treated as if you were a celebrity. They spent thousands on each person for these trips... We are encouraged to charge as much as we can. If the customer is a charity, or someone who doesn’t speak English, they are so easy to mislead, it’s gold dust to us. British Legion is great because the volunteers are elderly.” DAILY MAIL

Bank of England governor: capitalism doomed if ethics vanish

Capitalism is at risk of destroying itself unless bankers realise they have an obligation to create a fairer society, the Bank of England governor has warned. Mark Carney said bankers had operated a "heads-I-win-tails-you-lose" system. He questioned whether traders met ethical standards and said that those who failed to meet high professional standards should face ostracism. Speaking at a City conference, the Bank's governor warned that there was a growing sense that the basic social contract at the heart of capitalism was breaking down amid rising inequality. "We simply cannot take the capitalist system, which produces such plenty and so many solutions, for granted. Prosperity requires not just investment in economic capital, but investment in social capital." In a strongly worded critique of City behaviour in the run-up to the financial crisis, Carney said market radicalism and light-touch regulation had eroded fair capitalism, while scandals such as the rigging of Libor markets had undermined trust in the financial system. "Just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself. To counteract this tendency, individuals and their firms must have a sense of their responsibilities for the broader system." GUARDIAN

80% of small firms think they get 'poor deal' from big six energy suppliers

Only a quarter of FSB members thought there was enough competition in the energy market, echoing concerns of many British households. The FSB has presented its findings in a response to a consultation by regulator Ofgem, which ends on Friday, on whether the energy market should be referred to the Competition and Markets Authority. "It's clear from our research that many small businesses don't trust the big energy suppliers to deliver a smarter, fairer and more transparent billing process as four in five of our members say that energy companies don't care about them," said John Allan, FSB chairman. GUARDIAN

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Graphs at a glance: Financial Reporting Council (FRC) says just 2% of bank and building society audits were up to scratch.

In April 2011 the US Senate held a hearing on "The Role of the Accounting Profession in Preventing Another Financial Crisis". Kicking off the hearing the chairman of the Senate committee, Senator Jack Reed, commented:

"Prior to the collapse or rescue of nine major financial institutions in 2007 and 2008, they each received unqualified audit reports within months of their demise from various major accounting firms. So this hearing is not about one company or one auditor. This is about systemic weaknesses in the audit process that may continue to impair investor confidence and provide inadequate information to the investing public and to directors of public companies and to the markets in general.

The costs of these problems are staggering. The Financial Crisis Inquiry Commission estimated that nearly $11 trillion in household wealth was lost through retirement accounts and life savings being diminished in the crisis. Auditors who have the responsibility for examining and reporting on the companies' books and records in the cases I have cited sounded no distinctive and helpful alarms prior to the demise of these companies.

As such, serious questions have been raised about the quality of financial reporting practices and about the quality of audits that should have revealed key financial irregularities or the poor status of these companies."

In May 2014 The UK's Financial Reporting Council (FRC), "the UK’s independent regulator responsible for promoting high quality corporate governance and reporting", produced a report stating only 2% of Bank and Insurance Company audits were "good".

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Is a vote for UKIP a vote for its policies? Or is it a protest vote?

 

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Will the Tories and Labour learn the secret of UKIP's success? It's all about Trust.

Trust isn’t about knowing someone will do the right thing. It is about knowing what someone will do. UKIP seems trustworthy because what the party says is such a mix of keen insight as well as crass stupidity that they can’t be making it up. 

If UKIP were crafty and untrustworthy they wouldn’t be quite so crass. Whether we agree with them or not we trust them to mean what they say. Which means we know whether or not to vote for them. 

On the other hand we don’t trust the Tories because of the things they do. And we don’t trust Labour because of the things they don’t do.

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A guide on how to overcome the servant problem. A salutory read when you are selecting or electing domestic or public servants.

As we move from election to election we offer you this useful guide, published in 1899, to dealing with [public] servants. 

Pay particular attention to the sections warning what happens when you select someone without well checked references! Truly awful!


For those of you with no eyes to see, the book has an audio function - i.e. it will read itself to you (go to the full screen mode to hear this, it is very clever!).

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Rip-off News round-up. Our pick of the last week's media (Thu 22nd May)

The rich get richer: Britain's wealthiest DOUBLE their fortunes since the financial crash and are now worth £519billion

The fortunes of the 1,000 richest men and women in the UK rose by 15.4% in the last year. It also means that total wealth has doubled since 2009, when the top 1,000 were worth a measly £258billion. The figures were revealed in the Sunday Times Rich List. The list is based on 'identifiable wealth' - including land, property, other assets such as art and racehorses, or significant shares in publicly quoted companies. It excludes bank accounts, which the Sunday Times has no access to. Figures released by the Office for National Statistics last week revealed that there is a monumental gap between the rich and the poor in the UK, with the wealthiest 1 per cent owning the same amount as the 55 per cent poorest in the UK. DAILY MAIL

Revealed: Why millions WON'T get the £155 new state pension they're expecting

A major pledge of the new pension was that everyone who had paid all their National Insurance contributions would be guaranteed to get £155 a week. But a Money Mail investigation into the small print of the new flat-rate pension reveals as many as four in five older workers could miss out on the full flat-rate state pension of £155 a week when it is introduced in 2016. And millions face losing thousands of pounds in inflation-linked increases on company pensions. Disturbingly, not even the Government has calculated how much less than the promised amount people will end up getting. DAILY MAIL

Miliband sets out Labour's minimum wage plans. Tories and LibDems promise a rise too

The party will announce an exact figure - covering the years 2015 to 2020 - nearer the general election. Both the Conservatives and Liberal Democrats have already said they want a rise in the minimum wage. However any major increase is likely to be criticised by business groups worried that it would drive up costs and damage competitiveness. Mr Miliband said it was a "scandal" that there were five million people in work who "can't make ends meet". The Prime Minister's official spokesman said Downing Street believed that as a result of economic growth there could be a real terms increase in the level of the minimum wage, but that it should remain a matter for the Low Pay Commission to recommend its level. BBC NEWS

New RBS finance chief handed £1.9m 'golden hello' reigniting controversy over bankers' 'fat cat' pay

Ewen Stevenson was awarded 584,506 shares on his first day in the job on Monday to compensate him for payments he forfeited at his previous employer Credit Suisse. RBS shares are currently worth 326p each, up 2.3p on the day. Stevenson will enjoy an annual package of £1.9million a year, including a £800,000 salary, £280,000 in pension contributions, and £26,250 in benefits. He will also receive a controversial £800,000 fixed shares ‘allowance’, used by banks including RBS to swerve the EU bonus cap. Stevenson was recruited after Nathan Bostock resigned in December to join Santander UK after just ten weeks in the role. The revelations turn up the heat on the state backed bank, which is still 81 per cent owned by the taxpayer and slumped to a £8.2billion loss last year. RBS was accused of wasting taxpayers’ money after handing a £3.2million ‘golden hello’ to current chief executive Ross McEwan when he joined as retail boss of the bank in August 2012. The Government last month blocked RBS from paying bonuses twice the size of salaries - but approved the new pay measure at Lloyds. DAILY MAIL

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Gary Barlow OBE caught using a scheme, designed to promote the arts, to dodge tax

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Regulation in Britain: Compare and contrast regulation of Citizens and of Companies. Company executives pay piffling fines, ordinary citizens do jail time.

In May 2014 the energy regulator OFGEM boasted about its latest ‘record fine’: £12 million inflicted on E.on. OFGEM’s press release stated:

• E.ON’s large scale mis-selling results in biggest supplier payout to consumers 

• Ofgem found management arrangements were insufficient to protect against mis-selling

OFGEM has the power to fine upto 10% of revenue. E.ON’s UK revenue in 2013 was £9.9 billion. The £12million fine, about 0.1% of revenue, is not even a drop in that ocean of cash.

Money is the one thing that is not in short supply for Energy companies. They are awash with it. Fraudulent behaviour by our Energy and Financial sectors have been ‘punished’ by taking from them that which they have most of: money taken from their customers. Like fining Billy Bunter a doughnut – he may not like it, but he has plenty more. The loss of a doughnut will not reform him.

Fraud is directed by people, not companies. Directors don’t fear fines – after all it is almost inevitably the company that pays them. But while they have more than enough money to brush off fines, they have about the same amount of time as anyone else. A year in jail is a year in jail, whoever you are.

The Sentencing Council, appointed by the Lord Chief Justice and the Lord Chancellor of the UK, provides guidance to the British Justice System. Here is the guidance when it comes to frauds by ordinary citizens:

• "Confidence Fraud" (not unlike doorstep selling by energy companies) for sums of £500,000 or more: 5-8 years custody 

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