The BBC’s Nick Robinson v Alex Salmond: where will corporation tax be paid? Both are wrong, surely?!

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Graphs at a glance: How policy makers use averages to rip-off half the population

In an earlier post we pointed out that London is sucking the life out of the UK. Were we being fair?

 

It is certainly true that London has a greatly disproportionate share of the UK's economic activity.

One consequence is things in London cost more, from the price of a pint to the price of a house. 

So are people in London paid more than in the rest of the UK so they can afford higher "London Prices"?

Well, yes and no.

On average Londoners are paid more: 15% more than the UK average.  

But take a closer look, and the story is different.

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Rip-off News round-up. Our pick of the last week's media (Thu 11th Sept)

MPs' pay rise of 9% 'should go ahead'

Marcial Boo, chief executive of the Independent Parliamentary Standards Authority (Ipsa), said MPs did an important job and should not be paid a "miserly amount". Their pay will go up from £67,000 to £74,000 under Ipsa's plan. The PM, Nick Clegg and Ed Miliband called the hike unacceptable when it was proposed at the end of last year. The Conservative, Liberal Democrat and Labour party leaders argued it would be wrong when public sector pay rises were capped at 1%. But speaking to the Sunday Telegraph in his first interview since taking on the job, Mr Boo said a review of evidence had shown that economic forecasts were improving while MPs' salaries had "fallen behind" others working in comparable public sector roles. The proposed £74,000 figure was now seen by some as being "at the low end", he claimed, adding that pay needed to be fair to attract good candidates. The one-off increase is part of a package that will see MPs pay more into their pensions, as well as the end of resettlement payments. Ipsa says that overall the reforms will not cost taxpayers any more than the present scheme. BBC NEWS

Bedroom tax bill splits coalition as Lib-Lab pact forces second reading

David Cameron's authority received a damaging blow on Friday when a Liberal Democrat-sponsored bill aimed at modifying the bedroom tax was voted through to the next stage in parliament after dozens of Tory MPs ignored whips' demands to vote with the government. Labour MPs joined with the Tories' coalition partners to send the affordable homes bill, sponsored by Andrew George MP, through to a second reading vote by 306 to 231. Seventy Conservative MPs ignored a three line whip and stayed away from Westminister. Angie Bray, Tory MP for Ealing Central and Acton, voted against her party. Usually, the government can rely on a majority of more than 60. Social housing tenants judged to have too much living space have had their housing benefit cut since 1 April 2013, under a proposal known as the spare room subsidy by the government, but widely known as the bedroom tax. However, a shortage of smaller available homes has meant large numbers have been unable to move to cheaper accommodation yet still suffered the cut. If passed, the new bill would mean people who cannot be found a smaller home would be exempt from the cut in housing benefit. Disabled people who need a spare bedroom or who have had their homes adapted would be exempt. GUARDIAN

House builder Barratt doubles annual profits on back of Help to Buy scheme

The chief executive, Mark Clare, said: "Following the launch of Help to Buy, sales rates over the summer period last year were exceptionally strong. This year we have seen a return to more normal seasonal trends." The mortgage-subsidy scheme has given housebuilders a huge boost since it was introduced in April 2013. Barratt's profits soared to £390.6m in the year to 30 June. The private average selling price climbed 12.9% to £241,600, partly reflecting Barratt's move away from building flats to larger family homes since the downturn. The company completed 14,838 houses – 8.6% more than in the previous year (13,600). The builder expects to construct 15,700 homes in the current year, a slightly slower rate of increase. The Help to Buy scheme accounted for 30% of Barratt's sales last year, and 35% for Redrow, another major housebuilder. Help to Buy, which was due to end in 2016, has been extended to 2020. GUARDIAN

Sports Direct faces action from zero-hours staff over bonus scheme

Sports Direct, the retailer founded by billionaire Mike Ashley, is facing legal action from 250 workers excluded from a multimillion-pound bonus scheme because they were on zero-hours contracts. Lawyers acting for the part-time staff are preparing to file multiple claims for breach of contract at the high court. The employees were excluded from a bonus scheme that paid out about £160m worth of shares to 2,000 "permanent" workers in 2013. The claims, which have been gathered in partnership with workers' rights group Pay Justice, could amount to a £4m-plus bill for Sports Direct. The retailer has been widely criticised for employing nearly 90% of its staff on zero-hours contracts, which do not guarantee a minimum number of working hours a week and also fail to provide for annual leave and sick pay. Elizabeth George of law firm Leigh Day, which will lead the claims, said: "These are the staff whose hard work over many years has brought about the record profits that funded the bonus awards in the first place. It's plainly unfair that they should have missed out... We believe that they had a contractual right to the bonus because regardless of the zero-hours label that the company has given their contracts, they were all permanent employees of the company for the necessary number of years." Many of those taking part in the action continue to be employed by Sports Direct. Pay Justice is encouraging any other staff who believe they might be eligible to make contact via its website. GUARDIAN

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Graphs at a glance: Government increases the percentage of female police officers! By sacking male officers faster than they sack female officers!!

Question: How do you INCREASE the percentage of women in the police force while DECREASING the number of women in the police force?

Answer: You decrease the number of policeMEN faster than you decrease the number of policeWOMEN.

For example, if you have 20 women and 80 men, then 20% are women (20 out of a total 100 people). If you reduce the number of men such that you have 20 women and 20 men the percentage of women goes up to 50% (20 out of 40 people).

The House of Commons Library,  which provides impartial research for MPs, produced their "Social Indicators" report in September 2014. This report shows:

• Total police numbers fell by 15,825 between 2010 and 2014

Of these officer cuts:

• 1,335 were female
• 14,490 were male

As a result the percentage of women officers rose from 26% in 2010 to 28% in 2014. 

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The Scottish independence vote is going to the wire

If Scotland chooses independence, Chris, Fee and KJ wonder who might have to bail out whom...

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Rip-off News round-up. Our pick of the last week's media (Thu 4th Sept)

Gas costs you THREE times what the energy firms pay: Millions of households being ripped off after wholesale cost halves in six months

Wholesale costs have halved in six months yet bills have not fallen. British Gas customers are paying between £1.35 and £1.50 per therm. Its parent company, Centrica, announced profits of £900million for the first six months of the financial year. Yet the wholesale gas price paid by suppliers has hit a four-year low of less than 42p per therm, down from 72p in December. The other Big Six energy companies – nPower, EDF, SSE, E.on and Scottish Power – charge between £1.21 and £1.37 per therm. One therm of gas is enough to power a domestic boiler at full output for almost two hours. British Gas spokesman Tim Cowen said: ‘The wholesale cost of energy is now less than half the bill, which partly explains why the wholesale price can fall, but overall prices don’t... We also have other costs, such as regulated transport and distribution costs, that are rising.' The boss of one of the big six energy companies, nPower, has said Labour’s promise to  freeze energy prices if they win next year’s election is a factor in his company not reducing its prices. But Labour energy spokesman Caroline Flint rejected claims that her party’s pledge is to blame for energy firms keeping bills high. ‘It’s always the same old story – when wholesale prices go up, energy bills go through the roof, but when they fall consumers never see the full benefit,’ she said. The Competition and Markets Authority is holding an inquiry into the energy supply business. DAILY MAIL

Welcome to Copeland in north-west England: the last place where house prices are less than three times the average national salary

According to a study by the Trade Union Congress, back in 1997 one in five local authorities were deemed "easily affordable" with the cost of a home below three times earnings. But the combination of the housing market recovery across the UK and low wage growth since the recession means that areas which were traditionally accessible such as Oldham and Rotherham are now out of reach for many first-time buyers trying to secure a foothold of the property ladder. The value of a home in Oldham, near Manchester, was 2.73 times salary in 1997, but is now up at five times earnings. Rotherham was 2.78 and is now also at five times salary. House prices in Copeland, which lies between the north-west coastline and the Lake District, are 2.87 times the average salary, Barrow-in-Furness is the second most affordable area with Burnley third, the analysis showed. The study also revealed that 84pc of the UK now boast house prices at more than five times the local salary. TELEGRAPH

London and south-east grab the lion’s share of Help to Buy

7,501 buyers in the south-east and 2,837 in London have taken out either an interest-free loan on a new build home or used the mortgage guarantee that allows them to buy a home with only a 5% deposit. The popularity of the scheme in the south-east pushed the north-west into second place, where 6,180 buyers have completed a purchase. More than 48,000 homebuyers have used the scheme since its launch in October 2013. The scheme, it is open to all homebuyers regardless of their income, and can be used on properties costing up to £600,000. The Treasury said the scheme had allowed first-time buyers to access the housing market at a time when mortgage restrictions have locked many of the out. “Out of a total of 48,393 Help to Buy completions to date, 82% have been made by first-time buyers,” it said. The chancellor, George Osborne, added: “Help to Buy is working exactly as we intended. It’s helping first-time buyers on to the housing ladder. It’s a key part of our long-term economic plan, which is supporting hard working people to secure a better future for their families”. Critics of the mortgage guarantee element of Help to Buy warned when it was launched almost year ago that it would push prices in London and the south-east higher unless the government found a way to increase the supply of homes coming up for sale. GUARDIAN

London renters trapped in £1,000 a month 'rabbit hutch properties'

An increasing number of landlords are boosting their returns by splitting family homes into small studio flats, or even smaller living spaces which letting agents have dubbed "semi-studios". Recently buy-to-let specialist firm Platinum Property Partners suggested that an investor buying a £300,000 house could more than treble their returns by converting it and letting to separate tenants rather than a family. Spending £12,000 on converting the home into studios, said the lender, could generate rental income of £37,800 compared with £17,940 they would make from a family let. The result is a growing number of tiny spaces to let, some barely bigger than the recommended minimum. The Housing Act states that a studio flat need only be 110 sq ft – say 11ft by 10ft – to house two adults, while a single tenant can be accommodated in 70 sq ft – a room just 7ft by 10ft. A search of rental websites yielded several examples of rooms where a "mezzanine sleeping area" had been erected - in practice a large shelf, usually little more than a metre from the ceiling, with room for a mattress – making the room large enough to let to a couple. One home in west London, being marketed as a "dynamic studio flat" and available to rent for more than £1,000 a month, has a main living space measuring 9ft 6in by 9ft 3in, or just under 88 sq ft. In another nearby tenants must cook, eat and sleep in a space 10ft by 8.9ft. In 2012/13 London councils estimated that there were 184,878 homes with multiple occupancy (HMOs) in the capital, up by 20,000 on one year previously. Some London councils are acting to clamp down on conversions, with Haringey in north London recently extending rules on houses in multiple occupation to Tottenham to tackle what it described as an abundance of HMOs springing up in response to an increased demand for cheap, privately rented accommodation. GUARDIAN

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Graphs at a Glance: UK has one of the top ten richest regions (the top one) and nine of the ten poorest regions in Northern Europe

Research by the Inequality Briefing organisation reveals how big the gap between rich and poor in the UK has grown. To the extent that the UK has the single richest region  (Inner London) as well as nine of the ten poorest regions in Northern Europe(see the map below).

You can access their briefing paper by clicking here (and the graphic here), in which they state:

"the poorest UK regions are by far the poorest in Northern Europe. This is because the UK is much more unequal than other countries, where there is nowhere as rich as London, but nowhere as poor as our poorest regions."

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Graphs at a glance: ONS stats show 47% of those who graduated in the last 5 years are doing non-graduate jobs. The second biggest destination of new graduates in 2012 was catering, waiters, and bar staff.

Office of National Statistics (ONS) figures show a strong correlation between having a degree and being wealthy. However, 'correlation' does not prove 'causation'. i.e. just because two things happen together doesn't prove that they actually cause each other. Daffodils bloom in spring before tulips, but blooming daffodils aren't the reason why tulips bloom.

A degree doesn't cause wealth. Those who have the discipline to work hard academically to get a degree are more likely to have the discipline to work hard in their career to get wealthy. The key common factor is having the discipline and the work ethic.

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Rip-off News round-up. Our pick of the last week's media (Thu 28th Aug)

Workers in the UK are CHEAPER to hire than in Spain or Italy as stagnant wages erode British pay packets

The average cost of employing someone in the UK remained unchanged at 20.90 euros an hour last year – significantly below the EU average of 23.70 euros. Meanwhile the cost of employing someone in Spain is higher at 21.10 euros and higher still at 28.10 euros in Italy, according to official figures from the EU's statistics office Eurostat. The average hourly labour cost in Norway is more than double that of the UK at an eye-watering 48.50 euros an hour. Meanwhile Labour costs in Germany are now around 50 per cent higher than in the UK – 31.3 euros an hour versus the UK’s 20.9 euros. Labour costs in France are even higher at 34.3 euros an hour. In fact the UK is among just five countries that saw wages fall or stay the same between 2008 and 2013, including Poland, Hungary, Croatia and Greece. Wages are expected to grow by just 1.25 per cent this year, which amounts to a drop in real terms as inflation is currently at 1.6 per cent. A weak pound throughout the economic downturn may also have helped widen the gap between the UK and its EU neighbours. DAILY MAIL

High energy bills? Blame Ed’s price freeze threat says the boss of Npower

So far this year, wholesale gas prices, which make up nearly half of energy bills, have fallen by more than 50 per cent. But the boss of one of the biggest energy companies has said it would be too risky to cut prices ahead of winter because of Labour’s threatened price freeze. Paul Massara, head of Npower, said the firm had not reduced fuel bills despite a slump in wholesale prices – as an election victory for Ed Miliband would see them forced to stick with the new tariffs for 20 months. Last September, Mr Miliband said he would freeze gas and electricity bills in the UK for 20 months if he wins the general election in May next year. Charlie Elphicke, Tory MP for Dover and Deal, said: ‘Clearly Ed Miliband’s policy has backfired and is driving up energy bills today at a time when people can least afford it. Instead of making things easier, they are making them worse. Labour’s energy spokesman Caroline Flint defended its policy, saying: ‘All the energy companies have 101 excuses about why they won’t cut their prices, but if Npower are publicly admitting that they are keeping their prices artificially high and the Government is doing nothing about it, that shows exactly why we need reform of the energy market.’ DAILY MAIL

Food poverty: Faculty of Public Health issues malnutrition health warning

More people are suffering from malnutrition as a result of worsening food poverty, experts have warned. The Faculty of Public Health said conditions like rickets were becoming more apparent because people could not afford quality food in their diet. Data from the Health and Social Care Information Centre showed the number of those admitted to hospital in England and Wales had risen from 5,469 to 6,520 over the past year. Vice president of the Faculty of Public Health, John Middleton, said food-related ill health was getting worse "through extreme poverty and the use of food banks". The faculty recently claimed that UK food prices had risen by 12% since 2007. It also noted that in the same period, UK workers had suffered a 7.6% fall in wages. The main symptom of malnutrition is rapid weight loss - usually 5-10% within a few months. Other signs include: weak muscles, constantly feeling tired, an increase in illnesses or infections, children will not grow as quickly, and will show changes in behaviour becoming irritable, sluggish and anxious. Meanwhile, Durham Police and Crime Commissioner Ron Hogg told BBC Radio 4's Today programme some people were resorting to committing crime "simply to live". "The evidence shows that shoplifting and theft in general is rising exponentially and there must be a reason for that," he said, adding that it was important to address the causes of such crimes. Health Minister Dan Poulter said the government had "given local authorities a £5.4bn budget over two years to help them manage public health issues, including malnutrition, in their areas." He also said the rise in malnutrition could be partly due to better diagnosis and detection by health professionals of people at risk. BBC NEWS

EDF to pay £3m for mishandling complaints from vulnerable customers

EDF has been ordered to pay out £3 million to benefit “vulnerable customers” after an investigation by the energy industry watchdog Ofgem found that the big six supplier had breached complaint handling rules. The payout is the latest in a series of punishments meted out to the dominant energy suppliers and came just a day after Labour promised to strip any provider of its operating licence if it mistreated customers by repeatedly breaking the rules. The inquiry into EDF, a French state-owned firm, came after it recorded an increase of more than 30 per cent in the levels of complaints during the introduction of a new IT system in 2011. All the big six energy providers have been fined for similar reasons, as well as mis-selling. For example last October, Scottish Power agreed to pay £8.5 million to its customers after an investigation by Ofgem found it gave misleading information during sales. In March, the regulator found that the big six collectively owed more than £400 million to 3.5 million former customers who have switched supplier or moved house in the previous six years. It demanded that they make sure the money is returned. INDEPENDENT

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The Faculty of Public Health says rickets has returned as malnutrition rises

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