Excuses for being completely useless - Regulators (OFGEM; FCA/FSA; OFTEL et al), here are some good excuses for not doing your homework

In January 2014 the Labour Party issued another report, “Powering Britain: One Nation Labour’s plans to reset the energy market”. The report made various assertions relating to the period after 2010, conveniently overlooking Labour’s own lamentable record regulating the energy industry. It is quite extraordinary how much politicians care for us when out of power, and how little when in power. Wasn’t it Spiderman who said “With no responsibility comes great power”. Power to talk without having responsibility to deliver. Anyway, the report stated:

"Since 2010, household energy bills have gone up by over £300 a year whilst small businesses are paying over £13,000 a year more

Lack of competition in the retail market has resulted in consumers paying £3.6 billion more than they need to"

The report includes graphs showing how energy companies’ blaming wholesale cost (what the energy companies pay) for retail price (what you pay) rises since 2011 are phoney. Average annual increases between 2011 and 2013 have been:

• Electricity: wholesale up 0.5% per year; retail up 9.7% a year
• Gas: wholesale up 1.59% per year; retail up 11% per year

OFGEM, the energy regulator, denies that consumers are being ripped off though OFGEM accepts the need to “break the stranglehold of the big 6 in the retail market” (so we're not being ripped off, just strangled?) and has repeatedly blamed energy companies for not being "transparent" (i.e. telling the simple truth) about their wholesale costs.

Read More

Graphs at a glance: Cambridge University study shows fewer than 1 in 10 members of the public trust or regard as ethical banks and energy companies

The relationship between British Industry and British Government is the same as that between a dominatrix and her clients. Plenty of shouting and threatening, but no visible marks. 

Ministers appear in the news shooting out their lips, shaking their heads, scolding, threatening terrible consequences and spankings, but making no visible changes.

If you want to see a pair of reddened cheeks you need go no further than certain parliamentary committee rooms:

"I think you do evil" intoned Margaret Hodge, Chair of the Public Accounts Committee, who was being strict to the boss of Google, accused of tax dodging.

“I apologise to the Secretary of State and I should apologise to this committee and the taxpayer on behalf of our company. We didn’t have the systems in place that we needed” grovelled the boss of G4S having been caught out overcharging for offender tagging services. 

Margaret Hodge is matched by Andrew Tyrie, the man of the gimlet gaze who chairs the Treasury Committee. Peers of the Realm have been called liars by other peers of the Realm. Lord Lawson, sitting on the committee, chastised Lord Stephenson, former chairman of the wrecked bank HBOS, with the words "Either when you said that you were being dishonest, or else, if you believed it to be correct, you were delusional. I prefer to believe that you were not dishonest, and you were simply delusional."

Read More

It’s mid-winter and our energy bills are actually dropping... soon-ish... a tiny bit...

Fee and Chris explain it all to KJ...

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 9th January)

Cabinet split over George Osborne's plan for £12bn more welfare cuts

Work and Pensions secretary Iain Duncan Smith is alarmed at the chancellor's approach to social security reform, while deputy prime minister Nick Clegg warns of a 'monumental mistake.' As the debate intensified, Robert Chote, head of the Office for Budget Responsibility, confirmed that Osborne's plans would mean hitting the sick and disabled. Clegg criticised Osborne for ruling out a tax rise and even countenancing a tax cut for high earners, later adding: "I literally don't know of a serious economist who believes that you only do it from that lopsided, unbalanced approach. Almost all serious economists say you have some kind of mix." GUARDIAN

Lending to business suffers biggest fall since 2011, Bank of England data shows

The news raises concerns that economic growth is dependent on household spending, and casting doubt on the effectiveness of schemes intended to increase banks' appetite to lend. Lending to non-financial companies fell by £4.7bn in November, compared with a monthly average decrease of £1bn over the previous six months. But it was caused by a drop in loans to big businesses, whereas small business lending actually rose for the first time in five months. GUARDIAN

UK car sales at highest since 2007, helped by bank mis-selling compensation payouts

British new car sales rose to their highest level since 2007 last year, bucking a weak European trend to grow by 10.8 percent on the year. The Society of Motor Manufacturers and Traders (SMMT) says the sales were fuelled by growing confidence, cheap finance deals and PPI payments, shifting 2.265 million cars in 2013. Mike Hawes, the SMMT's chief executive, said it was difficult to measure the precise impact of the estimated £18bn of Payment Protection Insurance compensation, but that average payouts of £3,000 were having an impact: "It's enough to put a deposit down on a car." GUARDIAN

Workers to demand better pay deals after driving British car industry to an 11% sales surge

Unions say it is only fair that employees who took a pay hit when times were tough should share in the industry's current success. Mike Hawes, chief executive of trade body the Society of Motor Manufacturers and Traders, ­acknowledged: “The support the unions have given has been key.” But Mark Ovenden, boss of Ford in the UK, warned: “It is ­important to qualify the improvement.” He said Ford’s European arm would lose more than £600million this year, and wouldn’t break even until 2015. Yet it came as the manufacturer celebrated a bumper 2013 in which it notched up 37 years as Britain’s best selling car maker. DAILY MIRROR

Read More

Chancellor Osborne promises a further £25bn of cuts, half of which will come from welfare

Read More

Graphs at a glance: Confiscation orders recover just 0.35% of ill-gotten gains. Crooks keep £99.65 in every crooked £100.

It is not just taxes paid by the little people that are avoided by the big people. 

Nor is it just the big energy companies and banks that find it child's play to run rings around their poodlish regulators.

In 2012 the government's policy of pursuing people with no money rather than people with money to hide resulted in the prosecution of 9,863 people for benefits fraud and only 617 for tax fraud. Even though according to the National Fraud Authority tax fraud (£14 billion) is seven times greater than benefits fraud (£1.9 billion).

Such favours are not restricted to the unconvicted. A National Audit Office report published in December 2013 reveals that British courts follow the example of British taxmen, pursuing little crooks while letting the big crooks scarper with their ill-gotten capital gains: 

"The annual amount of fraud perpetrated by criminals in England and Wales has been estimated by the National Fraud Authority as some £52 billion. On this basis, it has been further estimated that, out of every £100 generated by the criminal economy, £99.65 was kept by the perpetrators."

While confiscation orders of upto £1,000 are almost all collected, larger amounts manage to do a runner. Big crooks have places offshore to hide their 'earnings', and banks of well paid lawyers to camouflage their villainy:

Read More

The CBI, Britain's big business lobby group, tells its members to pay their workers more

Fee and KJ predict what will happen next...

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 2nd January)

The CBI, Britain's biggest business lobby group, says "Pay your workers more"

John Cridland, director-general of the CBI, Britain's biggest business lobby group, criticised many of the 240,000 companies he is paid to represent for failing to pass on their new-found prosperity to employees. He told employers – whose FTSE 100 bosses are paid 136 times the national average – that they must ensure that all citizens benefit from the recovery. The GMB union warns that the real value of national average earnings has fallen by 14% since the start of the recession in 2008. Real earnings have dropped by more than 20% in London, with workers in Hammersmith and Fulham experiencing a 49% decline. By contrast, the average FTSE 100 boss collected £3.7m last year. Just three months ago Cridland attacked the Labour leader Ed Miliband’s plans for an increase in the minimum wage as a "real setback for Labour's pro-enterprise credentials". He said many companies could not afford to pay employees more than the £6.31 minimum wage for adults, and £5.03 for those aged 18 to 21. Miliband has said he will offer companies tax breaks if they commit to paying workers the living wage, which is set at £7.65 an hour. GUARDIAN

Energy costs 'deliberately inflated' by £150 per household

The so-called Big Six, British Gas, SSE, E.ON, EDF, npower, and Scottish Power, paid £4bn more for power than market rate, according to shadow energy secretary Caroline Flint. She accused the companies of paying over the odds to increase profits in other divisions of their companies or doing deals that were bad for customers. She added: "The time has come for a complete overhaul of our energy market. Labour will break up the big energy companies, put an end to the secret deals and force them to do all of their trading on the open market." Energy UK, which represents the big six suppliers, disputed the figures. TELEGRAPH

What economic recovery? Only one in 50 people believe things are better for them

The TUC survey looked at how people felt about the recent claims by Chancellor George Osbourne that ‘Britain’s economic plan was working.’  Out of 1,600 people polled many saw recent austerity measures as necessary but more than half wanted services that had been cut to be restored. The news will come as a blow to the Government which has been busy assuring voters that as the economy improves in 2013 and 2014 it will slowly be felt by everyone. TUC general secretary, Frances O'Grady said: ‘Voters accepted austerity as unpleasant medicine. But now they are realising that what they thought were the unpleasant side effects are what the Chancellor sees as a cure. Recovery seems to mean food banks, zero hours and pay cuts for the many, tax cuts and pay growth for the few at the top.’ DAILY MAIL

'It's a rip-off that makes Wonga look like Santa Claus': 300,000 of Britain's poorest people live at least 1km from a free ATM

There are 269 low-income areas with no free ATMs inside a 1km (0.6-mile) radius – with half of the most excluded people living in South Wales and the North. The people who relied on cash machines charging a flat fee were often poor - meaning they were disproportionately affected for taking out small amounts of cash. Labour MP Frank Field, who advises the Government on combating poverty, condemned the charges which range from 75p to £10. DAILY MAIL

Read More

Democracy puts strength in the hands of the many. Why in democratic Britain are the 90% treated like cattle for milking and for eating?

“Earth provides enough to satisfy every man's needs, but not every man's greed.”

― Mahatma Gandhi

Generally speaking our posts at Ripped-Off Britons are about who not to trust and why. For a change, in this post we do not write about untrustworthy people who gain our trust using flim-flam and deception – i.e. the usual roster of bankers, energy executives, politicians etc. For this post we write about the trustworthy people we have been persuaded by flim-flam and deception not to trust – all the ordinary people.

It isn’t enough for dodgy people to fool us into trusting them. For the dodgy to succeed it is necessary for us to mistrust their victims. It is necessary for us to doubt those in poverty (because they don’t work hard enough), those freezing in the cold (because they wilfully don’t put on an extra jumper), the unemployed (because they are lazy), the disabled (they secretly tango when no-one is looking) etc. The dodgy need us to mistrust their victims, because the victims are the witnesses and the evidence of their dodginess.

Doubtless some of these people are victims of their own foolishness. However it is very often true that the foolish make up a small minority of the victims. Consider the 2010 General Election. The Conservative party took 36.1% of the vote, and the turnout was 65.1% of the electorate: therefore the Conservatives won 36.1% x 65.1% = 24% of the country’s votes (less than a quarter). A figure that is at least better than the 2005 General Election, which the Labour Party won with just 22% of the electorate (Labour took 35.2% of votes cast, and just 61.4% of the electorate bothered to vote: 35.2% x 61.4% = 22%).

Some graphs from the think-tank Demos provide a good example of how we have been persuaded to mistrust ordinary people. Their report, “Generation Strains”, provides graphs showing attitudes of people split by generation:

Pre-War: Born before 1945

Baby Boomers: Born between 1945 and 1965

Generation X: Born between 1966 and 1979

Generation Y: Born between 1980 and 2000

The graph shows that on balance the public believe that most people on unemployment benefit (the dole) are fiddling in one way or another. (The graph's percentage figure = those who agree - those who disagree. So 0% means an equal number agree as disagree)

The Demos report comments that this belief seems based on a massive misunderstanding of basic facts:

Read More

Graphs at a glance: How the government goes after benefits fraudsters but lets off tax fraudsters

There are a number of differences between those who indulge in tax fraud and those who indulge in benefits fraud. The most basic is money: to dodge tax you probably have money, to steal benefits you probably don't. 



Is it this basic financial distinction that accounts for the differences we describe below? Do well paid legislators and prosecutors feel more empathy with tax dodgers then benefits cheats? 

The following graphs suggest perhaps so:

7.4 times more money is lost through Tax Fraud than through Benefits Fraud:

• Benefits Fraud: £1.9 billion
• Tax Fraud: £14 billion (We use the National Fraud Authority (NFA) report figures, though knowledgeable commentators on tax matters assert the loss is very much greater)

10 times more in percentage terms is pinched by tax dodgers than by benefits cheats according to the NFA report:

• Benefits: 0.7% of all benefits are taken fraudulently
• Taxes: 6.7% of all taxes are not paid fraudulently (i.e. doesn't include 'avoidance' which uses legal loopholes).

Read More