Rip-off News round-up. Our pick of the last week's media (Thu 27th Oct)

Theresa May faces Tory backlash over planned cuts to in-work benefits

Conservative backbenchers, including the former work and pensions secretary Iain Duncan Smith, are preparing to campaign against £3bn of planned cuts to in-work benefits, in a fresh sign of the pressure Theresa May faces from within her own party. Veterans of the backlash against the deep cuts to tax credits George Osborne was forced to withdraw last year are gearing up to put pressure on his successor, Philip Hammond, in the run-up to November’s autumn statement. They would like the chancellor, who has said he will “reset” tax and spending policy in the wake of the Brexit vote, to ease the hardship of families who are set to receive significantly lower handouts under the new universal credit (UC) system. While there is no parliamentary vote planned on the cuts, which have already been legislated for, the spectacle of centrist Tories taking to the airwaves to accuse the government of failing to protect the poorest families will underline the challenge May faces in governing her own party. Conservative MPs are particularly concerned about the low earnings thresholds workers hit before they start to lose some of their benefits; and the steep withdrawal rates, which mean some groups of workers would keep just 24p of every extra pound earned under the new system. David Burrowes, the Enfield Southgate MP who supported the battle against the tax credit cuts, said: “I share the concern that the changes to work allowances will mean that we do not yet have a welfare system where work always pays and too many people will be in work but in poverty.” Analysis by the Resolution Foundation thinktank suggests that families would be £1,000 a year poorer under UC, if the cuts are implemented. GUARDIAN

Number of Brits hospitalised by malnutrition QUADRUPLES

More than 16,000 cases of malnutrition were reported in hospitals in England last year. Malnutrition is described by the NHS as being a serious condition that occurs when a person’s diet does not contain the right amount of nutrients. More than 900 of these malnutrition cases were severe, which means that patients were in danger of starving to death. According to the NHS, there are an estimated three million malnourished people in the UK at any time. Campaigners believe increased food prices, lower wages and benefit cuts are to blame. Professor of public heath at Liverpool University, Simon Capewell, said: “It is a national scandal... The fifth wealthiest country on the planet is now suffering from Victorian diseases such as malnutrition, rickets, scurvy.” Professor Capewell said that for every person admitted to hospital for malnourishment, there will be 50 times that number getting care from their GP. Last year more than a million people accessed food banks because they were not able to afford their own food. The professor also highlighted that between 2007 and 2014 food prices rose 12 per cent, but wages dropped seven per cent. Labour MP Frank Field, who chairs the all-party parliamentary group on hunger, said: “The new data on malnutrition, as well as the data we have uncovered on the numbers of children who are underweight and anaemic, paints a grim picture of life at the bottom of the pile.” According to Mr Field, 20 per cent of children arrive hungry each morning to school. Tesco’s UK chief executive Matt Davies has warned that an increase in food prices will be “lethal” for struggling families. He said: “When family budgets are constrained, families end up buying the cheapest possible calories, which are often the least healthy, but become essential for mere survival.” EXPRESS

Economic benefits of expanding Heathrow 'exaggerated by up to £86bn'

Government figures show that the financial benefits of expanding Heathrow may have been overstated by up to £86bn, as rival Gatwick refused to rule out challenging the nod given by ministers to build a third runway at the west London airport. It has emerged that a report by the Department for Transport had more than halved previous estimates of the economic boost of Heathrow over 60 years, suggesting that an extra runway at Gatwick would bring virtually the same benefits. Government analysis suggested that expanding Gatwick would yield £54bn in benefits, less than the £61bn attributed to Heathrow but requiring the destruction of fewer homes and being a cheaper project overall. Government officials warned they disputed figures provided in the airports commission report by Sir Howard Davies that a third runway at Heathrow would boost the economy by up to £147bn, some £86bn more than the government estimate. INTERNATIONAL BUSINESS TIMES

Hard-up nurses being forced into debt as 35,000 rely on payday loans – almost double 2013's number

Unions have called for an end to the one percent NHS pay rise cap that has left nurses with a 14 per cent cut in real terms and forced them into debt. Payday lender CashFloat.co.uk’s research found that 11 per cent of nurses had applied to them for loans since January 2015, up from just six per cent in 2013. Josie Irwin, of the Royal College of Nursing , said: “It’s no surprise. They put up with the rise in the cost of living because of their commitment to caring for patients, but they can only be stretched so far.” A nurse from Buckinghamshire said: “My salary has been frozen for six years. I always end up needing more money.” And another, a mother of one from Hackney, said she had considered leaving the NHS through stress. She added: “Besides long hours and intense pressure at work, I am forced to take payday loans to pay my bills and support my family.” Danielle Tiplady recently completed her adult nursing course at King’s College, London. She said payday loans, food banks and university hardship funds were all becoming necessities for herself and her cash-strapped colleagues. Danielle, 29, said: “The alarming thing is a large number of nurses and students do use food banks and access hardship funds from universities. I do night shifts, weekends, bank holidays. I work during my actual holidays... I’m happy to do whatever when I’m there and I get stuck in because I know I’m part of the NHS. People who have this passion, I look and I see how upset they all are, and how tired they are, and they’re crying. They feel like they can’t do their job.” MIRROR

Delivery giant Hermes faces HMRC inquiry into low pay allegations

The move follows a Guardian investigation that revealed some self-employed couriers for the company, which delivers for retailers including John Lewis and Next, were taking home less than minimum wage. Some 78 couriers subsequently made complaints to Frank Field, the chairman of the House of Commons work and pensions select committee. They set out how their self-employment meant they received no paid holidays or sick pay. They also said they risked losing work if they were unable to do their rounds because of ill health or for other reasons. Twenty more also claimed they should be considered employees rather than self-employed. Edward Troup, HMRC’s executive chairman, said: “If we find that companies have misclassified individuals as self-employed, we will take all necessary steps to make sure they pay the appropriate tax, national insurance contributions, interest and penalties.” Troup made clear that he could not comment on individual cases, but said: “Individuals cannot be opted out of employment rights and protections, simply by calling them ‘self-employed’. We are committed to tackling false self-employment.” GUARDIAN

HMRC to take over work of tax credits firm Concentrix

Concentrix, the firm accused of incorrectly withdrawing tax credits from hundreds of claimants, is to have its work brought back in-house to HM Revenue and Customs, staff have been told. Work now being done by the US company will be taken on by HMRC immediately, said the Public and Commercial Services union (PCS). Last month HMRC said it would not sign a new contract with the company, whose present contract was due to end in May next year. Concentrix, which was at the centre of a parliamentary debate this week, had handled tax credit claims, having won a multimillion-pound contract to save the UK government money by preventing incorrect or fraudulent claims. MPs heard from one claimant, Sarah Broome, a 40-year-old single mother from West Molesey, Surrey, who claimed she was forced to go six weeks “out of pocket” due to a decision by the company to end her payments. OnThursday, Rebecca Long-Bailey, shadow chief secretary to the Treasury, said the HMRC move was a victory for those families who had been unfairly targeted by Concentrix. Mark Serwotka, general secretary of the PCS union, said: “We’re delighted HMRC has agreed with us this work is best carried out in-house and, crucially, has accepted our argument to protect the jobs of Concentrix staff by transferring them into the department. We will be pushing for these workers to be employed on the same terms as their HMRC colleagues. Sadly, this could all have been avoided. The fiasco is further evidence it is a false economy to hive off important public services.” GUARDIAN

Earnings rise fastest for the low-paid, thanks to higher minimum wage

A 6.2% rise for the lowest paid UK workers meant pay inequality narrowed between April 2015 and early April 2016, the figures from the Office for National Statistics (ONS) indicate. The pay gap between men and women has also shrunk slightly, it said. Pay overall rose at its joint highest rate since the financial crisis, driven by wage rises in the private sector. Weekly earnings for full-time workers were 2.2% higher in April from a year earlier, or by 1.9% after inflation. Despite the increases, the Resolution Foundation think tank points out that typical earnings still remain 6.8% below pre-financial crisis levels. The median average full-time worker was paid £539 a week - or £28,028 a year - before tax in April 2016. Generally, a worker in the highest paid 5% of employees saw a 2.5% rise in earnings in the year to April, but it was the lowest paid who have seen the fastest increase. The National Living Wage (NLW) came into force on 1 April, requiring employers to pay workers aged 25 and over at least £7.20 an hour. This led to an immediate pay rise for 1.8 million workers. Workers aged 21 to 24 have been paid the National Minimum Wage of £6.95 an hour since 1 October. Previously it was £6.70 an hour. Hourly earnings, excluding overtime, for full-time jobs among the lowest-paid increased by 5.9% from £6.86 to £7.26 between 2015 and 2016. Laura Gardiner, senior policy analyst at the Resolution Foundation, said: "The introduction of the National Living Wage has well and truly made its mark on pay across Britain. The new wage floor has contributed to a significant closing of the gender pay gap and a welcome fall in pay inequality. "But while 2016 has been the strongest year for pay in over five years, we may not see this level of growth again this parliament given the outlook for lower earnings growth and higher inflation in the wake of the Brexit vote. Debbie Abrahams, Labour's shadow work and pensions secretary, said: "The figures are yet more disappointing news for working people, with real earnings still below their pre-recession peak in 2008 and the number of people stuck in low-paid jobs increasing by 66% on last year." BBC NEWS

Bill for PPI mis-selling scandal tops £40bn, as Lloyds pays out another £1bn, Barclays £600m

The costliest mis-selling bill in UK financial services history became even more expensive on Thursday after Barclays set aside a further £600m to handle the cost of claims. Data compiled by the thinkthank New City Agenda shows that this top up for Barclays has pushed the total provisions incurred by the industry to £40.2bn. Lloyds Banking Group makes up £17bn of that total. The size of the payouts have already been cited as a reason for booming car sales and holidays. As one penny off income tax costs about £4bn, it could be regarded as a boost to household income. Not all the money has gone straight into consumers’ pockets. The latest data from the Financial Conduct Authority shows that from January 2011 – when claims started to be made – until the end of July about £25bn had been distributed by the banks and other firms which sold PPI. Claims management companies have, according to the National Audit Office, received up to £5bn of the payouts. The banks have also incurred billions of pounds of costs in handling the claims. They have not used all the money they have set aside, in anticipation of more applications for compensation. More than 50m PPI policies were sold, according to the former City regulator the Financial Services Authority. Banks sold most of them – around 45m policies, worth £40bn. A consultation run by the FCA into setting a deadline for claims closed earlier this month and could result in a cut-off point of June 2019 for remaining customers to make their case. It will also herald an advertising campaign, expected to cost £40m, to encourage customers to come forward and beat the deadline. GUARDIAN

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Rip-off News round-up. Our pick of the last week's media (Thu 20th Oct)

TfL to take over London's suburban rail services? Mayor Khan vows to end 'nightmare' delays and overcrowding

Plans to improve rail services for millions of London commuters have been submitted to the Government in a bid to end the “nightmare” of delays and overcrowding. Presenting his business case for devolving suburban rail services to Transport for London, Mayor Sadiq Khan said passengers had been coping with poor services for too long. He said the move has cross-party support from in and outside London, including MPs, London boroughs and Surrey, Kent and Hertfordshire councils. Transport Secretary Chris Grayling has so far appeared lukewarm about the TfL proposal, with insiders suggesting he was concerned about the impact on Kent and other counties outside London. However, he is not thought to be against more devolution in principle, and TfL hopes that with county councils on board he could be persuaded to hand over more control. TfL’s case focuses on suburban rail, but spells out that longer-distance services going beyond London’s boundaries would still be run by the Government and suggests these  commuters would benefit from related improvements. Crucially Kent, which has previously voiced the strongest objections, now says it is open to discussions. TfL’s business case sets out how  further devolution would help tackle the housing crisis, with potential for up to 80,000 new homes to be built within one kilometre of stations on newly-devolved lines, as well as boosting economic growth including  thousands of extra jobs. EVENING STANDARD

Just 2.6% of grammar pupils are from poor backgrounds, new figures show

Just 3,100 of the 117,000 pupils who currently attend grammar schools come from families poor enough to be eligible for free school meals. The proportion of students (2.6%) is lower than previously reported, and was last night seized upon by critics of the government’s plans for more selection in the state system. Across all schools, the average proportion of pupils entitled to free school meals in areas that currently select on academic ability is thought to be around 18%. The figures, compiled by the House of Commons library from Department for Education records from January this year, illustrated how selection was failing those from the least affluent backgrounds. The government’s green paper on education reform proposes that existing grammar schools should be allowed to expand and new ones be allowed to open, while existing comprehensives could opt to be selective. It also proposes encouraging multi-academy trusts to select within their family of schools, in order to set up “centres of excellence” for their most able students. Lucy Powell, the former shadow education secretary, said there were now 23 Tory MPs who supported her campaign to force a government U-turn on their plans to introduce more selection. “All the evidence shows that selective education creates barriers for disadvantaged children rather than breaking them down,” she said. “These figures tell the real story. A minuscule number of children on free school meals pass the 11-plus.” GUARDIAN

NHS head disputes Theresa May’s £10bn claim over health funding

The chief executive of NHS England, Simon Stevens, disagreed with the prime minister’s statement, which she repeated on Monday, that “the government has not just given him £8bn extra, we’ve given him £10bn extra”. The £8bn was pledged last year by the then chancellor, George Osborne. Stevens told the Commons health select committee that the NHS had only received the money it had asked for in two of the five years covered by the £8bn: 2016-17 and 2020-21. For those two years the budget increases the NHS is due to get are “in the zone” of the sums it needs to implement its Five Year Forward View plan to transform patient care to keep the service sustainable.  “But for the [other] three years we didn’t get the funding we requested,” Stevens said pointedly. “As a result we have a bigger hill to climb. It’s going to be more of a challenge in 2017-18, 2018-19 and 2019-20 [than NHS chiefs expected],” he added. While the NHS would get only “modest” extra sums in 2017-18 and 2019-20, “2018-19 will be the most pressurised year for us ... [because] we will have negative per-person NHS funding growth.” Sally Gainsbury, a senior policy analyst with the Nuffield Trust health thinktank, said that while NHS trusts had cut their unit costs by 13% since 2010, their income had gone down by 18% over the same period. GUARDIAN

Self-employed 'now earning less than in 1995'

The Resolution Foundation said that while the UK's self-employed workforce had grown by 45% since 2001-02, their weekly earnings had fallen by £60. It blamed the rise of lower paid jobs and the financial crisis, which had reduced pay rates. Adam Corlett, economic analyst at the Resolution Foundation, said that almost five million UK workers were self-employed - about one in seven workers and a record high. They included construction workers, hairdressers, taxi drivers, tutors and IT consultants, he said. According to the research, average self-employed wages were £240 a week in the 2014-15 financial year - the most recent period for which data is available - down from about £300 a week in 1994-95. TUC general secretary Frances O'Grady said: "Britain's new generation of self-employed workers are not all the budding entrepreneurs ministers like to talk about. "While some choose self-employment, many are forced into it because there is no alternative work. Self-employment today too often means low pay and fewer rights at work." Some companies have recently been accused of taking advantage of self-employed staff. Taxi app firm Uber is awaiting the outcome of a employment tribunal after two of its drivers claimed it was acting unlawfully by not paying holiday or sick pay. The US company says it has 40,000 drivers in the UK, so the result could have a significant impact on its costs. Meanwhile, takeaway delivery firm Deliveroo faced protests in August after saying it would pay its self-employed drivers per delivery, rather than on an hourly basis. The firm, which was also criticised by the Department for Business, soon backtracked and made the scheme optional. BBC NEWS

Asda faces £100m bill in equal pay dispute

Asda is facing a £100m claim from thousands of female workers after a class action was given the right to proceed with their battle for equal pay. Around 7,000 shop floor workers have complained they were received between £1 and £3 an hour less than staff at Asda’s distribution centres, the majority of whom are men. The case dates back to 2002 and to date around 9,500 past and current workers from across the UK have joined the class action, which is represented by law firm Leigh Day. Asda said it “continued to strongly dispute the claim” and had tried to argue that because the shops and distribution centres were in different locations workers were entitled to separate pay arrangements. “This is a dramatic victory for the workers we represent”, said Lauren Lougheed, a lawyer in the employment team at Leigh Day. “Asda tried to argue that because the shops and distribution centres were in different locations, with different pay arrangements, that Asda could pay the men what they like... This judgment will have far reaching implications on other supermarket equal pay claims including those we are bringing on behalf of around 400 Sainsbury’s workers who are in a similar situation.” TELEGRAPH

Thousands of rural pharmacies under threat again after funding talks with ministers break down

One in four local pharmacies had been threatened with closure after ministers said they wanted to withdraw a £170million subsidy for community chemists. This meant that up to 3,000 out of the 12,000 pharmacies in the UK – many of which are in rural areas - faced closure. There was a temporary reprieve last month when new care minister David Mowat said he would wanted “to make sure we are taking the right decision”. However the Pharmaceutical Services Negotiating Committee said it has now been told it faces cuts of 12 per cent in the current financial year, with more to follow in the year after. Sue Sharpe, the committee’s chief executive, said that if pharmacies were forced to close it would simply add to the pressures on the rest of health service as more people would turn to their GPs. TELEGRAPH

Sir Philip Green: MPs recommend stripping BHS ex-chief of knighthood

BHS was sold by Sir Philip last year, but then collapsed with the loss of 11,000 jobs and carrying a £571m pension deficit. A lengthy three-hour debate was held, during which Sir Philip was attacked from MPs across the parties. They did not hold back. Among the most notable criticisms was that he was like the autocrat Napoleon and the former boss of the Mirror group of newspapers, Robert Maxwell, as well as being an "asset-stripper". Labour's David Winnick branded Sir Philip "a billionaire spiv who should never have received a knighthood. A billionaire spiv who has shamed British capitalism". He added that his "billionaire's lifestyle" was a "form of provocation" to BHS employees and pensioners. Conservative MP Richard Fuller said: "Freedoms that are given to people who have enormous power over fellow citizens are based on people doing not only the legal thing, but the right thing.” Frank Field, chairman of the Work and Pensions committee, said Sir Philip could have solved the problem easily and been of help in building a stronger pensions regime. "We are dealing with a man who has huge sums in wealth. He could have dealt with the pensions problem and walked away smelling of roses," he said. "He would have helped us begin to set the debate about how we deal with pension deficits. He had nothing to say and couldn't help us lead the debate." Mr Field is pressing for the Pension regulator to take legal action against Sir Philip to make good the BHS pension deficit. A damning MPs' report on the High Street chain's failure, published in July, concluded Sir Philip had extracted large sums and left the business on "life support". At the time Sir Philip described the report as "the pre-determined and inaccurate output of a biased and unfair process". BBC NEWS

Pension blow for five million: Treasury U-turn means retirees are stuck with their rip-off annuities

The U-turn is a huge blow to older savers who were forced to convert their retirement savings into annuities. They can no longer hope to escape the often poor-value deals. Ministers say they acted to stop pensioners being exploited – they were facing fees of up to 20 per cent for cashing in. But campaigners accused the Government of breaking its promises and leaving millions in the lurch. Bought by workers with their pension funds when they retire, annuities pay a regular income for life. Many produce meagre returns. Under pension freedoms introduced in April last year savers reaching retirement were told they no longer had to buy an annuity with their pension pots – and could instead spend the money as they liked. But the reforms excluded those who had already bought an annuity. Some had only small pension pots and received little income. Others were victims of mis-selling. Ministers announced a few months later that the freedoms would be extended to these five million annuity holders from next April. That raised hopes that a second-hand annuities market would spring up to throw them a lump sum lifeline. But insurers have proved reluctant to buy back the annuities – with as few as two in ten major players saying they intended to do so. For their part, savers faced handing over thousands of pounds for financial advice. The Treasury said it was scrapping the policy because so few firms had signed up and that savers risked being stuck with poor deals. It claimed that only a small proportion of pensioners would have cashed in. DAILY MAIL

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Rip-off News round-up. Our pick of the last week's media (Thu 13th Oct)

RBS destroyed customers' businesses for profit and rewarded staff who targeted struggling firms, leaked files suggest

New documents show a project, labelled by one executive in an email as a 'dash for cash', crippled firms as it dangled hefty bonuses to staff who targeted firms to be 'restructured.' RBS, which was bailed out in the financial crisis by taxpayers, allegedly destroyed thousands of businesses during the crisis to boost profits, according to the secret documents obtained by BuzzFeed News and the BBC. It is believed that RBS bought assets at rock-bottom prices when firms hit difficulties in the economic turmoil which erupted in 2007 to then flog for a profit. Staff were encouraged to target struggling companies and levy them with harsh fees. It meant many went bust while it boosted its own balance sheet. The documents support previous allegations made by now government business adviser Lawrence Tomlinson in 2013. He concluded that RBS deliberately destroyed viable businesses and used their financial turmoil as a way to hoover up assets cheaply. RBS customers have accused it for years of changing borrowing limits based on unrealistically low valuations of their business. Subsequently, many breached lending thresholds. It meant RBS then forced them into the hands of its so-called Global Restructuring Group. GRG would then apply higher interest rates and pressured customers to sell assets in order to repay loans, took equity stakes in businesses and pushed them into administration – all claims also made by Lawrence Tomlinson. GRG was wound-down by RBS in 2014, a year after the report. Roughly 16,000 businesses are said to have been put into GRG after the credit crunch, with loans issued by the unit increasing by a whopping 500 per cent to £65billion between 2007 and 2012. This allowed GRG to rack up healthy profits of £1.2billion in 2011. Many of the owners affected have stepped forward to say they suffered mental and physical health problems as a result of their treatment by the bank. DAILY MAIL

Travellers at risk of 'disgraceful' 'exchange rate profiteering' at airports

Consumer champion Martin Lewis, of  MoneySavingExpert.com, launched a fierce attack on financial companies for taking advantage as one leading airport bought at 1.35 euros and sold at just 97 cents. Tweeting a picture of a Moneycorp exchange rate board which showed buy-sell spreads had edged to more than a third, he wrote: "No wonder they shouted at me 'you're not allowed to photograph that'. Disgraceful exchange rate profiteering [content deleted]" David Buik, a markets commentator for leading stockbroker Panmure Gordon, said consumers were being widely exploited at airports: "The foreign exchange system is not down to Brexit alone... But the pound is under pressure and we are back to the volatility days. It is somewhat inevitable that they will capitalise on vulnerable people. They know exactly what they are doing." Holidaymakers were offered 97 cents for the pound at several airports on Friday after a torrid day in the currency markets following the overnight "flash crash". TELEGRAPH

Bernard Matthews sale sparks pension row as owners will get millions - but members of its pension scheme only 1p in the pound

The details are set to spark a fresh row over pension rights and whether owners should receive huge sums from firms despite black holes in retirement funds. The Bernard Matthews Pension Fund has been left with a gaping £17.5million deficit which is likely to swell to £20million, the report commissioned by MPs show. The business, best known for producing Turkey products, was placed in a special type of insolvency called a pre-pack administration which allows assets to be sold in advance of a firm going under, leaving creditors unpaid. Politicians on the Work and Pensions Select Committee are probing the sale and the use of pre-pack administrations. The MPs asked Professor Prem Sikka of the University of Essex to examine the pre-pack administration arrangement and he claims Rutland is likely to receive £39million. The proceeds of the sale will also be used to make a full payment of £46.4million to lenders Wells Fargo Capital Finance (UK) and PNC Financial Services UK. The administrators have already billed £790,000 and legal fees are likely to amount to £668,000. MPs claim the pre-pack administration arrangement acts against the interests of pensioners who need better protection. Sikka said: ‘The administration strategy seems to have been carefully crafted to enable secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and dump the pension scheme and other liabilities. No attention has been paid to the hardship caused to retired and existing employees’. DAILY MAIL

Crackdown on firms that won't prop up pensions: Regulator demands extra powers in wake of BHS collapse

BHS collapsed into administration earlier this year with a £700million black hole in its retirement scheme. Its failure puts the financial security of thousands of former employees at risk and has led to stinging criticism of former owner Sir Philip Green. The billionaire tycoon – who sold the 88-year-old retailer to three-times bankrupt former racing driver Dominic Chappell a year before its failure – has pledged to 'sort' the deficit but he is yet to make good on that promise. The collapse led to a joint probe by Parliament's business and pensions committees. Work and Pensions Select Committee chairman Frank Field has been a vocal critic of Green, accusing him of behaving like Napoleon and surrounding himself with 'yes' men. There is mounting anxiety over the burden large businesses face from their pension schemes. The 5,945 programmes overseen by the Pension Protection Fund had a combined deficit of £459.4billion at the end of August, £82.6billion more than a month earlier. Big names with major issues include Tesco, which has a £5.9billion black hole. However, a push to give the regulator more power is likely to meet stiff opposition from businesses. Any money put into paying down a firm's pension deficit cannot be handed out to shareholders in the form of dividends. In the case of privately-owned firms such as BHS, this simply means rich businessmen pocket less cash. But large public firms are often partly owned by major pension providers such as Aviva or Legal & General – so forcing them to pay out less could paradoxically hurt other savers. DAILY MAIL

Rent-to-own firm BrightHouse admits new customer affordability checks bring in fewer customers

The controversial retailer, which lets shoppers pay for goods in weekly instalments with annual interest rates of up to 99.9%, said that more detailed checks on shoppers’ finances were having a material impact on the number of customers signing contracts and hurting profits. The company is seeking to bring its practises into line with the regulatory regime overseen by the Financial Conduct Authority (FCA), which took over regulation of the rent-to-own sector from the Office of Fair Trading in 2014. The FCA revealed in the summer that it was concerned about some practices in the rent-to-own sector, including the way in which major players such as BrightHouse had been dealing with affordability assessments and customers who fall behind on payments. Rent-to-own firms sell furniture and other households goods to customers on weekly payment plans. The sector, led by BrightHouse, Perfect Home and Buy as You View, has flourished in recent years as it has become more difficult for some households to access credit. Interest rates are typically higher than on mainstream forms of borrowing. BrightHouse says its rates range from 69.9% to 99.9% depending on the customer’s credit history and length of contract. In the year to 31 March 2016, BrightHouse’s customer base shrank 0.4% to 276,200 as it screened shoppers more carefully, but the average monthly spend for each customer increased by 5% to £120.87. Group sales were up 5.4% at £370.7m, delivering a pre-tax profit before exceptionals of £21m, in line with 2015. Citizens Advice said last week that the number of people struggling with debts to rent-to-own firms and on guarantor loans rose by 16% in the second quarter, as borrowers no longer able to get payday loans move to other, less heavily regulated forms of borrowing. GUARDIAN

Brexit slowdown means 'lower rise' in living wage expected next year

Weak pay growth in the wake of the UK's vote to leave the EU is set to reduce the increase to the National Living Wage by 10p, the Resolution Foundation forecasts. The think tank now expects the rate to rise to £7.50 an hour next year. That would still mean an annual pay rise of up to £600 for full-time staff. The National Living Wage, which was introduced in April, currently stands at £7.20 per hour for workers aged 25 and over. About 4.5 million workers are expected to benefit from the increase - with the amount dependent on how many hours they work. Stephen Clarke, policy analyst at Resolution Foundation told the BBC's Today programme: "The National Living Wage relates to average earnings and because of Brexit, many forecasters, including the Bank of England, revised down their earnings growth; therefore the National Living Wage has also been revised down." Despite the fact that the increase is lower than expected, the report adds that the National Living Wage is still set to transform the country's low-pay, helping some 800,000 workers out of low pay by 2020. Low-pay is defined as an employee earning two-thirds of the country's typical hourly pay. BBC NEWS

Rail delays: New plans to compensate passengers when train is 15 mins late

Rail passengers can currently only make claims when services are delayed by at least 30 minutes. The Department for Transport (DfT) said its new scheme will initially launch on Govia Thameslink Railway services in the next few months before being expanded on other networks. Passenger and rail industry groups said they supported the plans. The changes would also see compensation of 100% of the single fare ticket value for delays of between 60 and 119 minutes. After its initial launch on GTR in the coming months, the DfT said the scheme will be expanded - starting with any new South Western, West Midlands and South Eastern franchises. GTR operates Southern services, which have suffered months of disruption and strikes on rail routes in south London, Surrey, Sussex and Kent. Commenting on the plans, Anthony Smith from watchdog Transport Focus said: "Train companies need to do more to alert passengers to compensation. Passengers expect the process to become smarter and automatic, taking the onus off them to have to claim in the first place - automatic Delay Repay is the way forward". The DfT said all future rail franchises will be required to introduce the compensation policy, and officials said they will explore opportunities to roll it out for all franchises during the current parliament. BBC NEWS

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

Prime Minister warned as number of homeless hits record levels

Tory MPs have told Theresa May that tackling homelessness will be a key test of her commitment to social justice after official figures showed it had risen to its highest level for nearly a decade. A total of 15,170 households were classed as homeless in the three months to June 2016 - a jump of 10% on the same period last year. Around a third of these are in London, according to new figures from the Department for Communities and Local Government (DCLG). The last time a higher level was recorded in England was in the period April-June 2008, when 15,680 households were classed as homeless. Tory MP Bob Blackman, who is bringing his Homelessness Reduction Bill to the Commons for debate on October 28, said the figures were a national disgrace. His Private Member's Bill will impose a duty on local authorities to help prevent people at risk of losing their homes from becoming homeless and it is likely to need Government support to become law. A supporter of the Bill, Tory MP David Burrowes, said the Bill would be a litmus test of Mrs May's social justice credentials. The most common reason for losing a home was the ending of a tenancy with a private landlord. This is now causing a greater proportion of households to become homeless than at any point since current records began in 1998 - roughly a third (32%) of all reported cases in the three months to June 2016. Shelter chief executive, Campbell Robb, said: "Every day at Shelter we hear from families struggling to keep their heads above water when faced with the double blow of welfare cuts and expensive, unstable private renting, with far too many ultimately losing the battle to stay in their home. "On top of this, stripped-back budgets and a drought of affordable homes are making it increasingly difficult for overburdened councils to find homeless families anywhere suitable to live." DAILY MAIL

Osborne says the Bank of England's quantitative easing makes the rich richer

The former chancellor, George Osborne, has said that money printing by the Bank of England has made the rich richer and that interest rate cuts have hurt savers. Speaking from Washington in an interview with Bloomberg TV, Mr Osborne said: “We need to offset the very necessary loose monetary policy and the distributional consequences that it is having. Essentially it makes the rich richer and makes life difficult for ordinary savers.” “There’s a role for government policy not in stopping that monetary policy which keeps the economy strong but in mitigating its impact. I think all of us who believe in free markets need to work harder to find an answer to the anger that people clearly feel out there.” The Bank produced its own analysis in 2012 which showed that its quantitative easing (QE) scheme – which it restarted in August to support the economy in the wake of the Brexit vote – inflates asset values. And the Bank has acknowledged that the rich have more of these assets than the poor, meaning they automatically benefit more. Yet, as chancellor, Mr Osborne never commented on the distributional consequences of the Bank of England’s monetary stimulus measures or interest rate cuts, despite widespread complaints from some groups that QE was making the rich richer. His June 2015 budget was also widely criticised for entailing a much bigger cut to the incomes of poorer families than those in the top half of the distribution, as he slashed £12bn from the benefits bill by 2020. In the wake of the 2015 general election Mr Osborne also scrapped the Treasury’s distributional analysis charts showing the impact of overall budget tax and welfare changes, which critics said was born of a desire to disguise the regressive nature of his policies. The Institute for Fiscal studies has however, continued to publish the charts. Mr Osborne did, however, implement policies in office designed to help savers, such as pensioner bonds for the elderly and a virtual elimination of tax on savers’ interest income. In August the Bank's Monetary Policy Committee voted to increased its £375bn asset purchase programme by a further £70bn, made up of £60bn of Government bonds and £10bn of corporate bonds. INDEPENDENT

Thousands more NHS operations cancelled than figures show, report claims

Official figures in May showed the number of hospital operations in England cancelled at the last minute because of a lack of staff or beds rose to 74,086, its highest in 15 years. However, that statistic only records cancellations on the day of admission. About half of English NHS trusts admitted in response to Freedom of Information requests that they had cancelled nearly 42,000 operations between one and three days before patients were admitted. The new figures give a picture more in line with official figures published in Scotland, Wales and Northern Ireland, where the definition of last-minute cancellations is wider and is taken over several days. May’s official figures marked the worst record of cancellations for the NHS in England since 2001-02, when 81,743 patients had procedures cancelled on the day they were supposed to happen. Experts warned that the data was a sign of the pressures on the health service. At the time, Clare Marx, president of the Royal College of Surgeons, said that pressures on A&E units, staff shortages, and bed shortages due to a lack of social care for discharged patients were contributing to the problem. An NHS England spokesperson said: “The proportion of patients seeing their operations cancelled at the last minute remains under 1% in spite of record numbers of operations being scheduled... Our national data collection rightly requires trusts to focus on monitoring the number of last-minute cancellations, as this is where the most distress is caused for patients.” GUARDIAN

'Deeply unfair' fees of up to £900 for the poorest energy customers should be scrapped, says watchdog

When households run up a large energy bill they are unable to pay, their energy provider often installs a prepayment meter to recoup the debt over time. Households have to use the meter to pay for their energy in advance so they cannot get further into debt. Every time they top up, a proportion of the balance is also taken to help eat away at the debt. However energy companies often charge between £200 and £900 to install the meters, including other costs. These sometimes include up to £17 to send the indebted customer a letter. Ofgem today called for a cap of between £100 and £150 on the amount energy customers have to pay, as well as a blanket ban on these fees for the most vulnerable energy customers. If a household does not pay up an energy debt, the supplier can apply for a court order to fit a prepayment meter, even if it's against their will. This is generally done as a last resort when a resolution can't be found to repay the debt. But providers often charge 'warrant costs' to customers for the installation. This can include fees for administration and locksmith charges if firms need access to a property, and can be as much as £900, according to Ofgem. In 2015, the average amount charged was £400 per installation, which includes costs such as court fees, and 86,000 meters were installed under warrant. But as the customers having meters installed under warrant are already struggling to afford their energy bills, the extra fees are likely to push them into even more debt. The watchdog says of those currently with a prepayment meter, around eight per cent of gas and six per cent of electricity customers are in debt to their energy supplier. Ofgem says the fees should be wiped out for the most vulnerable customers such as those in financial hardship, those with physical and mental health issues and those with learning disabilities. Following the Competitions and Markets Authority investigation into the energy market, the amount prepayment customers pay will be cut by around £75 per customer from April 2017. This temporary price cap for the four millions households on prepayment meters will be introduced until all homes can be fitted with smart meters by 2019. This cap was bought in because the cheapest tariffs for those customers are currently £260 to £320 more expensive than for those with a standard meter. DAILY MAIL

Executive pay to be investigated by MPs

MPs have launched an inquiry into corporate governance, focusing on executive pay, worker representation in the boardroom and the lack of women in senior positions. The Business, Innovation and Skills Committee has recently held inquiries into BHS and Sports Direct. The investment arm of insurer Legal and General has also warned Britain's top companies to curb executive pay. It said that significant shareholder opposition "should not be ignored". Companies should take note if more than 20% of shareholders voted against a pay deal, Legal and General said. It comes after the Prime Minister recently pledged to overhaul the way businesses are run. BP, WPP and Smith and Nephew have been among the big companies where investors have revolted against boardroom pay. In April, 59% of BP shareholders voted against a 20% pay rise for chief executive Bob Dudley, worth £14m. However, that vote was not binding and Mr Dudley received the rise despite BP's falling profits. In 2013, amid growing investor unhappiness over excessive pay, the government gave shareholders a binding vote every three years on a firm's pay policy. At BP, the next binding vote is in 2017. MPs will look at the factors which have led to a steep rise in executive pay over the past 30 years in comparison with the salaries of more junior employees. Mr Wright said: "We on the committee are also keen to explore the issue of ever growing pay increases to executives, especially when there often seems to be very little connection with company performance or any pay rises to the vast majority of employees. The High Pay Centre thinktank released a study in August which showed that on average chief executives were paid 140 times more than their employees. Prime Minister Theresa May has said she wants shareholders to have the power to veto executive pay every year, and wants companies to publish figures showing the difference between the average worker's salary and that of the chief executive. She also wants employees to sit on the committee that oversees how much bosses are paid. Last week, Sports Direct said it would put work representatives on the board after it came under fire for its treatment of its workers at its troubled Shirebrook warehouse. BBC NEWS

Volkswagens produce double the legal emissions limit a year after dieselgate - but it's the cleanest carmaker of them all

Sunday marked the 12 month anniversary since 'dieselgate' first erupted: when United States Environmental Protection Agency revealed that some Volkswagen diesel models were fitted with defeat devices specifically aimed at cheating emissions tests. But one year on from the biggest automotive scandal in modern times, Volkswagen has been found to be selling the least polluting cars of any vehicle manufacturer. Transport & Environment found that VW models currently being sold new in dealerships still emitted double the Euro6 nitrogen oxides (NOx) requirement - but that's cleaner than any other carmaker. The findings were published on Monday as part of the motoring environmental agency's report Dieselgate: Who? What? How?, which also found that not one single mainstream car brand complies with the current Euro 6 air pollution limits for diesel cars and vans in real-world driving. Tests were conducted on around 230 diesel models in total. Data was taken from investigations conducted by the British, French and German governments, as well as a large public database, all of which were based on real-world on-road figures rather than laboratory measurements. Fiat and Suzuki diesel cars were found to be the dirtiest of all, on average polluting 15 times more than the legal NOx limit determined by Euro 6 standards. Renault and Nissan vehicles exceed the limit more than 14 times, Vauxhalls were found to pollute 10 times more the restriction while Volkswagen diesel cars polluted twice as much as the Euro 6 target. The motoring group said the results of the emissions tests shone light on the 'scandalous cover up' within the automotive sector and called for action to clean-up tailpipe pollutants of vehicles in Europe. Greg Archer, clean vehicles director at T&E, said: 'The true scandal of Dieselgate in Europe is national regulators turning a blind eye to the glaring evidence of test cheating with the sole purpose of protecting their national carmakers or their own business.' Despite committing to rectifying all 1.2 million UK diesel models affected by the scandal by the end of 2016, VW has admitted it has only managed to fix 10 per cent of all impacted cars so far. DAILY MAIL

Apple pays £89m tax fine for underreporting income in Japan

Apple has been ordered to pay about 12bn yen (£89m) in taxes for improperly reporting income associated with its Japan iTunes unit, according to reports. The news comes weeks after the EU hit Apple with a record £11bn tax penalty, ruling its 25-year “sweetheart deal” with Ireland was illegal. Apple’s unit in question has reportedly paid the amount that was asked by the Tokyo Regional Taxation Bureau. The tax authority argued that the iTunes unit, which sends parts of its profits earned from fees paid by Japanese subscribers to another Apple unit based in Ireland, had not been paying a withholding tax on these earnings in Japan, according to local broadcaster NHK. It was not immediately clear when the bureau issued the penalty or when Apple agreed to pay it, and the tech giant did not respond to a request for comment. The EU has been a strong critic of multinational companies such as Apple, Starbucks and Fiat Chrysler that have benefited from keeping their money overseas. The move allows these companies to avoid paying hefty taxes they could face by bringing the money back to the US. European Commissioner Margrethe Vestager, in charge of competition policy said that EU member states cannot give tax benefits to selected companies, after Apple was ruled to pay £11bn in tax to Ireland last month. “This is illegal under EU state aid rules. The commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” she said. “In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.” Tim Cook, Apple’s chief executive, said the Ireland tax ruling was “total political crap” and “maddening”. INDEPENDENT

Rising London house prices spark departure of thirtysomethings

Analysis by the group Generation Rent showed that 65,890 people in their 30s moved from London to another part of the UK in 2014-15, a net loss of 30,410 in that age group. This was 48% higher than in 2011-12, when 20,590 more 30 to 39-year-olds moved out than moved in. Internal migration data from the Office for National Statistics also showed a sharp increase in the number of children leaving the capital. In 2014-15, 26,920 more children under 10 moved out of London than came in, compared with a difference of 19,980 three years previously. Generation Rent said the exodus had taken place during a period in which house prices in London rose by 37%, compared with 16% in the UK as a whole, and rents increased by 10%, compared with 4% outside London. It said almost two-thirds of people moving out of London had gone elsewhere in the south-east and the east of England commuter belt, while 12% had moved to the Midlands and 11% to the north of England. Only among twentysomethings are more people moving into London than out; in 2014-15, there were 37,950 more people in this age group living in the capital than the year before, a 3% increase. Research by Lloyds bank found that moving to somewhere an hour’s commute from London could mean paying hundreds of thousands of pounds less for a family home. While the average price of a home in London transport zones one and two was £741,919, in Wellingborough, Northamptonshire, the average was £183,345, while in Peterborough, it was £189,319, Lloyds said. GUARDIAN

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EU rules that Apple must pay, retrospectively, €13bn in taxes plus interest to Ireland

SOURCE BBC NEWS: Apple should give Ireland 13bn euros in unpaid taxes, European Commission rules

After a three-year investigation, the European Commission has concluded that the US firm's Irish tax benefits are illegal. The Commission said Ireland enabled the company to pay substantially less than other businesses, in effect paying a corporate tax rate of no more than 1%. Ireland and Apple both said they disagreed with the record penalty and would appeal against it. The standard rate of Irish corporate tax is 12.5%. The Commissions's investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003 and about 0.005% in 2014. The company said: "Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned." The record tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year. The US Treasury, which said last week that the European Commission was in danger of becoming a "supranational tax authority", said the latest ruling could "undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU". In Apple's case, 90% of its foreign profits are legally channelled to Ireland, and then to subsidiaries which have no tax residence. At the same time, countries can scarcely afford not to co-operate when Apple comes calling; it has a stock market value of $600bn, and the attraction of the jobs it can create and the extra inward investment its favours can bring are too much for most politicians to resist.

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Rip-off News round-up. Our pick of the last week's media (Thu 15th Sep)

ts

Bank of England to buy “tax dodging” Apple debt to encourage it to invest here

In the Bank of England’s latest attempt to stimulate the economy, it announced a list of 100 companies, including Apple, whose debt it will start hoovering up with £10bn of freshly printed sterling. The hope is that this will ultimately spur investment and provide a boost for the wider economy, which has been hit by uncertainty surrounding the Brexit vote. For the first time, the BoE is targeting its stimulus package at overseas firms, including McDonalds, France’s state-owned electricity firm, EDF and German car-maker, Daimler, which owns Mercedes. UK-based companies including Vodafone and BP are also featured. However, several experts have pointed out that the Bank cannot track where the money goes, meaning there is no guarantee that the companies actually invest extra money at all. The Bank said it included companies that made “a material contribution to economic activity in the UK,” which included those, “with significant employment in the UK or with their headquarters in the UK”. This is not the first time the Bank has turned on the printing presses to buy up company debt; it did so at the height of the financial crisis in 2009, but the majority of previous rounds of so-called quantitative easing have focused on purchasing government bonds. This is the first time the Bank has extended QE to non-UK firms. Some economists have questioned whether previous monetary stimulus has benefited the whole economy or simply served to artificially inflate asset prices. Apple is particularly controversial. In August the European Commission ordered the California technology giant, the most valuable publicly traded company in the world, to pay €13bn (£11bn) in back taxes to Ireland over a “sweetheart” deal which, the Commission claims, allowed Apple to pay just 0.001 per cent tax on its sales in some years. INDEPENDENT

Number of workers on zero-hours contracts rockets by 20% in one year to hit nearly a million as pressure grows on Theresa May to tackle job insecurity

A record 903,000 people reported they are now working on the controversial contracts - which do not guarantee a minimum number of hours - an increase of 156,000 since last year. Nearly 3 per cent of the UK workforce are not guaranteed a minimum number of hours, the Office for National Statistics (ONS) figures show, increasing pressure on Theresa May to meet her pledge of tackling job insecurity. Women make up 55 per cent of those on zero-hours contracts, while one in five of those on the contracts is in full-time education. The majority of workers on zero-hours contracts are young, part-time or in full-time education. The average number of hours worked by people on the contracts is 25 hours a week, with around a third saying they want more hours. Campaigners said today's latest estimates found in the ONS' Labour Market Survey, shows zero-hours contracts have moved well beyond the student job market, with half of the latest increase aged 25 and over. The Business department said Government legislation had stopped firms banning workers on zero-hours contracts from working elsewhere, but added that seven in ten workers on the flexible working arrangements were happy with the number of hours they work. DAILY MAIL

UK domestic policies dented middle incomes, not globalisation, says Resolution Foundation

The Resolution Foundation said welfare cuts and housing costs were largely to blame for the dwindling fortunes of the lower middle classes during certain periods in the two decades before the 2008 financial crisis. The thinktank said too much weight has been given to the idea that an acceleration of global trade between 1988 and 2008 and the swelling middle classes in China dented the fortunes of lower middle income households in richer countries. Resolution said: “Domestic policy is central to determining working people’s living standards even in a globalised world. Changes to trade policy, even where desirable, are not a substitute for progressive taxes and benefits, fair wage policies and sufficient housebuilding.” In an analysis of the 20 years to 2008, it found that stagnating or declining incomes in the UK could often be explained by “identifiable factors such as rising housing costs, welfare policy and economic shocks – suggesting that global forces are only one part of the story”. The thinktank claims that the so-called “elephant curve”, which suggests very strong income growth for the global middle class in emerging markets such as China, and near-stagnation for the lower middle classes in rich countries, is misleading. GUARDIAN

Barclays cover-up as boss hid report exposing greed culture

Andrew Tinney, former chief operating officer of Barclays Wealth, is accused of hiding a 'highly critical' dossier after it was delivered to his £5million mansion. The Financial Conduct Authority is now seeking to have the 51-year-old banned from senior roles. Tinney, who now works for a Cypriot videogame company, is challenging the decision. The claims date from 2012 when he was asked to oversee a clean-up at Barclays Wealth Americas. He commissioned the consultancy Genesis Ventures to produce a report into the division. The study claimed BWA was pursuing a 'revenue-at-all-costs' strategy, presiding over a 'broken culture' in which the business was allowed to spin 'out of control'. One banker questioned by the investigators said that when he reported concerns over potential rule-breaking, he was told: 'I don't have time for this bull****.'  Another said that when their team presented a risk report, a boss threw it across the room saying: 'This is a piece of s***.' It is claimed Tinney was so horrified by the contents he shredded the only hard copy when it was motorbiked to the Surrey home he shared with his wife and children. The FCA report says he discussed the study with his manager, the chief executive of wealth. They agreed to act on it to improve behaviour of the staff – but decided that its contents should not be seen by anyone else. Later that year, however, Barclays was rocked by the Libor scandal, in which traders conspired to rig interest rates. It led to the resignation of chief executive Bob Diamond – once branded the 'unacceptable face' of banking over his pay – and saw the bank hit with penalties of £290million. Tinney was asked about the issue, the FCA claims, and denied the report existed. When one of the bank's lawyers asked Genesis Ventures for a copy, Tinney is alleged to have told them not to release it. Months later, the Federal Reserve Bank of New York asked for a copy of the report. When the bank finally got its hands on the study directly from Genesis Ventures, Tinney was suspended. DAILY MAIL

"Reign of terror" tax credits firm Concentrix will not have contract renewed

Concentrix, the US firm accused of incorrectly withdrawing tax credits from hundreds of claimants, will not have its contract renewed, HMRC says. Concentrix won a £75m contract to try to save the government more than £1bn in incorrect or fraudulent tax credit payments in May last year. Labour MP and chairman of the Commons Work and Pensions Committee Frank Field, who had urged the government to investigate concerns over Concentrix, welcomed HMRC's decision, saying the firm's "reign of terror" was coming to a close. The BBC earlier reported the case of Nicola McKenzie, a teenage mother who had her child tax credits stopped after she was wrongly accused of being married to a 74-year-old dead man. The Treasury has revealed 120 cases since last October where Concentrix did not "fully" meet the performance standards laid out in its contract. But it is feared the actual number may be higher. The Facebook campaign group Concentrix Mums, which has 5,600 members, says hundreds more people have been affected by errors. Tax credits - the Child Tax Credit and the Working Tax Credit - are government payments made to households on low incomes. Concentrix's government contract is based on a payment-by-results model, with the "maximisation of revenue flows" as one of its key requirements - meaning it makes more money if it cuts more payments. BBC NEWS

Greene King to move remaining pub workers off zero-hours contracts

The Suffolk-based company said it was in the process of moving workers to contracts that guarantee a minimum number of hours, following its takeover of the Spirit Pub Company last year. In 2013, Spirit, the owner of chains including Chef & Brewer and Wacky Warehouse, said that most of its 16,000 employees were on the contracts, which give no guarantee of work from one day to the next. The hospitality industry is the biggest user of such contracts, which have been criticised by unions for not offering workers any security over pay. Greene King, which had already moved its staff from zero-hours contracts before buying Spirit in 2015, said it was working on moving employees to new minimum hours contracts. A spokesman said: “We do not have zero-hours contracts in Greene King pubs. Following criticism of its employment practices, Sports Direct said it would offer 18,000 workers at its shops contracts guaranteeing at least 12 hours’ work a week, although it has emerged that this change could take until the end of the year. On Sunday, pub firm JD Wetherspoon said that it would allow 24,000 staff to choose between a zero-hours contract and one offering fixed hours after a successful trial of the scheme. Its chairman, Tim Martin, told Buzzfeed that around two-thirds of staff had opted to move off zero hours and on to guaranteed contracts, guaranteeing around 70% of the typical number of hours they work each week. GUARDIAN

Watchdog to probe banks and building societies as some punished savers but failed to help borrowers after BoE rate cut

Financial institutions including First Direct, which is owned by HSBC, and Scottish Widows, part of Lloyds, seized on last month’s rate cut to a historic 0.25 per cent low to roll back interest rates on their leading savings deals. But – despite warnings from Bank governor Mark Carney – they have not yet reduced borrowing costs for their mortgage customers. Banks make money by lending savers’ cash out to people who take on debt. Some of the profit from interest is passed on to savers and the bank keeps the rest. When savings rates are cut but borrowers’ interest rates stay the same, it means a larger profit is typically going to the bank. Scottish Widows Bank has also cut savings rate without reducing its standard variable rate for mortgages. But a spokesman said its SVR would be reduced from 3.99 per cent to 3.74 per cent on October 1. A string of building societies are also dragging their feet. They include West Bromwich, the seventh largest, which has cut some savings rates by between 0.15 and 0.2 points. A spokesman said it last reduced SVR rates in August 2014, from 5.84 per cent to 3.99 per cent. ‘Our SVR still remains competitive today, even after any recent reductions from other lenders have been applied,’ he said. An FCA spokesman said: ‘We will be writing to all mortgage providers to understand how decisions on the standard variable rate for new and existing mortgage customers have been made in response to the change in the base rate.’ DAILY MAIL

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Rip-off News round-up. Our pick of the last week's media (Thu 1st Sep)

'TTIP is dead': French President casts doubt on EU-US trade deal

Negotiators have been locked in TTIP talks since 2013 and had hoped to reach a conclusion by the end of this year. However, the talks have made slow progress, with objections on both sides of the Atlantic. Matthias Fekl, France's minister of foreign trade, said the country would formally call for an end to talks when ministers meet in Slovakia next month. "These negotiations are dead and France wants an end to them," he told French radio. "There is no political support in France for these negotiations." French President Francois Hollande said France would not accept a deal in its current form. Sigmar Gabriel, Germany's vice Chancellor, said this weekend that TTIP talks had "de facto failed, even though nobody is really admitting it... We Europeans of course must not succumb to American demands," he added. "Nothing is moving forward.” US presidential candidate Donald Trump has promoted protectionist trade policies, while rival Hillary Clinton has also cast doubt on a TTIP deal. Many claim that TTIP, a free trade agreement being negotiated between the European Union and the United States, will have far-reaching negative impacts in Europe on jobs, the environment and the economy. TELEGRAPH

Neil Woodford scraps "largely ineffective" bonus pay at his investment firm

The move at Neil Woodford's fund management business runs counter to conventional wisdom in the City that bonuses are needed to motivate staff. His firm's 35 staff will get a rise in basic pay and benefits as compensation. Craig Newman, chief executive and co-founder of Woodford Investment Management, said in statement: "There is little correlation between bonus and performance and this is backed by widespread academic evidence. Many studies conclude that bonuses don't work as a motivator, as expectation is already built in. Behavioural studies also suggest that bonuses can lead to short-term decision making and wrong behaviours." To back up the claim that bonuses are ineffective or damaging, the statement from Mr Woodford's firm points to several academic studies, and quotes from an article in the specialist publication The Journal of Corporation Law. This said: "Financial incentives are often counterproductive as they encourage gaming, fraud and other dysfunctional behaviours that damage the reputation and culture of the organisation... They produce the misleading assumption that most people are selfish and self-interested, which in turn erodes trust." BBC NEWS

Fuel economy: just two cars deliver advertised mileage

Just two cars deliver their advertised fuel economy when on the road, with the thousands of other models 30% worse on average in the real world, according to comprehensive new data. Some cars, such as the Fiat 500 and Ford Fiesta, gave barely half the mileage advertised. The result is that drivers are being misled and paying far more to drive, say experts, who warn that a stricter official test coming in 2017 will only close about half the gap between official and real fuel efficiency. The data from leading testing company Emissions Analytics covers 60,000 models and was published on Thursday, the first such database available to the public. It uses onboard equipment to measure mileage over four hours of real-world driving. In contrast, the official regulatory test is a gentle lab-based exercise. The worst gap between official miles per gallon (MPG) and real-world performance was for the Fiat 500, which is rated at 70.6MPG, but only delivered 39MPG on the road, a 45% drop. Other popular petrol cars performing at least 40% worse on the road include the UK’s most popular car, the Ford Fiesta, as well as the Ford Focus, Toyota Yaris and Mini Hatch. Some diesels, which generally have better fuel efficiency, also had 40% gaps, such as the VW Golf and Peugeot 308. The only cars to produce better fuel efficiency on the road were the 4.7-litre engine Aston Martin Vantage, which gave 21.5MPG in the real world, 5% higher than in the lab, and the 3.7l Nissan 370Z, which was 1% better on the road at 26.6MPG. The best on-the-road mileage was produced by the Honda Civic, which did 61.8MPG in the real world, though this was still 21% lower than its official mileage of 78.5MPG. The Citroen C3 was next best, with 60.3MPG, 28% lower than its official rating. The worst actual fuel economy came from the BMW X5, with just 16.2MPG, the Range Rover Sport (17.5MPG) and the Porsche Cayenne (17.8MPG), all well below official ratings. Julia Poliscanova, clean vehicles manager at campaign group Transport & Environment, said: “The fuel consumption gap has become a vast chasm. Carmakers’ manipulation of the weak, outdated lab test is widespread, affecting diesel and petrol cars. This means a total waste of motorists’ money and an increase in global warming emissions.” GUARDIAN

EU staff petition attacks ex-EU President Barroso over Goldman Sachs job

More than 75,000 people have signed an EU staff petition calling on former European commission president José Manuel Barroso to forfeit his pension for bringing the European Union into disrepute by joining Goldman Sachs. The petition, organised by a small group of EU officials, accuses Barroso of “irresponsible” and “morally reprehensible behaviour” for joining the American investment bank. Although Barroso is not the first former ex-commissioner to join Goldman, his appointment has sparked anger among rank-and-file staff, who have highlighted the bank’s role in mis-selling sub-prime mortgages, as well as lending money to the Greek government before the country’s debt disaster exploded. In a scathing denunciation of their former boss, the officials describe the Goldman job as “a disastrous symbol” for the EU and “a gift horse for europhobes”. “It is a further example of the irresponsible revolving-door practices, which are highly damaging to the EU institutions and, even if not illegal, morally reprehensible.” Ex-European commissioners must inform the EU executive of any new position for up to 18 months after they step down. Barroso took up the post at Goldman Sachs 20 months after leaving the commission. A Goldman Sachs spokesman said: “José Manuel’s experience and advice in this time of uncertainty will be extremely valuable to our clients and their reaction to his appointment at Goldman Sachs has been very encouraging.” The bank also defended its Greek currency swaps “as entirely legitimate debt management transactions” that were in line with EU rules. GUARDIAN

Apple should give Ireland 13bn euros in unpaid taxes, European Commission rules

After a three-year investigation, the European Commission has concluded that the US firm's Irish tax benefits are illegal. The Commission said Ireland enabled the company to pay substantially less than other businesses, in effect paying a corporate tax rate of no more than 1%. Ireland and Apple both said they disagreed with the record penalty and would appeal against it. The standard rate of Irish corporate tax is 12.5%. The Commissions's investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003 and about 0.005% in 2014. The company said: "Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned." The record tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year. The US Treasury, which said last week that the European Commission was in danger of becoming a "supranational tax authority", said the latest ruling could "undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU". In Apple's case, 90% of its foreign profits are legally channelled to Ireland, and then to subsidiaries which have no tax residence. At the same time, countries can scarcely afford not to co-operate when Apple comes calling; it has a stock market value of $600bn, and the attraction of the jobs it can create and the extra inward investment its favours can bring are too much for most politicians to resist. BBC NEWS

'Property is better bet' than a pension says Bank of England economist

Haldane believes that property is a better bet for retirement planning than a pension. “It ought to be pension but it’s almost certainly property,” he said, adding: “As long as we continue not to build anything like as many houses in this country as we need to ... we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.” This is not the first time the Bank of England’s chief economist, Andy Haldane, has raised eyebrows with his comments on pensions. In a speech in May, he admitted that he was unable to understand pensions because the system was so complicated.  “I consider myself moderately financially literate – yet I confess to not being able to make the remotest sense of pensions,” he said. “Conversations with countless experts and independent financial advisers have confirmed for me only one thing – that they have no clue either.” Haldane owns two homes – one in Surrey and a holiday home on the Kent coast. His basic salary at the Bank is £182,000 and he is in line for a pension of more than £80,000 a year when he retires. GUARDIAN

PricewaterhouseCoopers fined more than £3m for failing to spot black hole at collapsed payday lender

PricewaterhouseCoopers signed off accounts showing the now defunct FTSE 250 company made annual profits of £165.2m in 2007. But it later emerged PwC had failed to spot a deep hole in the books – and the company in fact made a loss of £96.5m that year. Cattles shares collapsed and eventually were suspended – leaving investors previously unaware of the situation nursing heavy losses. The Financial Reporting Council, the accountancy watchdog, yesterday fined PwC £2.3m and ordered it to pay £750,000 of legal fees. The watchdog also fined PwC partner Simon Bradburn £75,600 and issued him and his firm with a ‘severe reprimand’ – saying their conduct ‘fell significantly short of the standards reasonably to be expected of them’. In February 2009, Cattles announced that publication of its 2008 accounts would be delayed, sending its shares down 74 per cent in just one day, and in the following months Cattles said it was in breach of its banking agreements. Trading in its shares was suspended and PwC resigned as auditors. Two Cattles directors were banned from the City in 2012 for misleading investors about the quality of the company’s loans book. The FRC accepted that PwC and Bradburn were ‘deliberately misled’ by the company, but said they ‘failed to exercise sufficient professional scepticism’. DAILY MAIL

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