Bank of England's
recovery policies have increased inequality, finds S&P
A study by Standard & Poor’s has found that the low
interest rates and quantitative easing used to rescue the economy after the
2008 crash have handed extra wealth to the richest households by propping up
stock markets and supporting booming house prices. The report said the
wealthiest 10% of households held 56% of all net financial assets in 2008. By
2014 the proportion of the nation’s wealth in the hands of this group had risen
to 65%. Without government policies to restrict house price rises and promote
greater equality, the report said the situation would only get worse. The
finding in the report – “QE And Economic Inequality: The U.K. Experience – is
likely to wound policymakers in Threadneedle Street who have repeatedly
rebutted criticism that the Bank’s policies favoured the rich over the poor. “While
unconventional monetary policy measures such as QE proved successful in
restoring confidence and supporting the economic recovery, an unintended
consequence has been to exacerbate wealth disparity between rich and poor,”
said Tatiana Lysenko, senior economist at S&P. Under the QE programme, the
Bank of England has spent £375bn buying government bonds from the banking
sector to encourage investment in riskier assets. Officials hoped investors
would direct investments into new technologies and assets that improved
productivity. But most of the money has been invested in shares and property. Home
ownership will likely drop in the coming decades, said the report, perpetuating
high income and wealth inequality far into the future. GUARDIAN
Right To Buy puts 40%
of ex-council homes in private rental, with higher rents - MPs' report
Forty per cent of ex-council flats sold through right to buy
are being rented out more expensively by private landlords, the Commons
communities and local government select committee has found. It also found that
in some areas councils could be forced to sell up to 97% of properties upon
vacancy. MPs expressed concern that the discount applied to starter homes could
make them an attractive investment for those who can already afford to buy a
home, as after five years owners will be allowed to sell at full market value.
The true affordability of starter homes was also questioned. Lord Kerslake told
the committee: “I think it is hard in London to see a property that requires a
salary of £77,000 and a deposit of £90,000 as really meeting the definition of
affordable.” Prioritising starter homes over affordable rent also has the
potential to affect affordable housing levels, the committee stated, as
housebuilders will seek to build homes with the highest possible returns. The
committee called on the government to release annual statistics on how many new
homes are built by each local authority, how many are sold under right to buy,
and their tenure. Senior figures in the social housing sector have been
critical of the decision to cut social rents by 1% a year, which will cost
housing associations a lot of money. David Montague, chief executive of housing
association L&Q, told the committee: “For L&Q, the annual loss by year
four is almost £60m... For g15 [a group of London’s 15 largest housing
associations], the annual loss by year four is £500m; for the sector, we
estimate that the annual loss is £1.6bn. Imagine what we could have done with
that money if we had borrowed against it. That is a lot of homes. We have lost
a very significant amount.” GUARDIAN
Doctors training as
specialists at all-time low, leaked figures show
Doctors’ leaders have described the figures as “very bad for
the NHS”, especially as it is already struggling with shortages of key medical
personnel in a number of areas, such as general practice and A&E. Figures
compiled by Health Education England (HEE), the NHS’s medical training and
education body, show that the number of Foundation Year 2 (F2) doctors who have
applied to start training as a specialist in a branch of medicine next August
in the NHS has fallen to just 15,855. That is 1,251 fewer than in 2013 – a 7.9%
drop – and 453 fewer than the 16,308 who applied last year, a 2.8% decrease. The
number of F2 doctors seeking to become family doctors has fallen particularly
sharply. Only 4,863 such medics have applied to train as GPs from this August –
25% fewer than the 6,447 who did so as recently as 2013. That raises further
questions about David Cameron and Hunt’s repeated pledge to increase the number
of GPs in England by 5,000 by 2020. “To see such a large number of doctors
junior considering their options and even leaving the NHS in the early stages
of their careers is incredibly worrying,” said Dr Johann Malawana, the chair of
the BMA’s junior doctors’ committee. “This will only worsen the recruitment
crisis we are already seeing in many parts of the health service. GUARDIAN
David Cameron's
mother signs anti-cuts petition
Mary Cameron, 81, has put her name to a campaign against
plans by Conservative-run Oxfordshire County Council to close a number of the
centres. Retired magistrate, Mrs Cameron, told the newspaper: "My name is
on the petition but I don't want to discuss this any further." She
reportedly signed the petition while visiting her son in Oxfordshire. Campaigners
are trying to stop the closure of nearly all of Oxfordshire's 44 children's
centres - the county council wants to keep eight hubs, to save £8m pounds. The
petition describes the proposals as a "false economy", and says the
early intervention services provide numerous economic and other long-term
benefits. Campaign organiser Jill Huish said she was "not surprised"
to have the Prime Minister's mother's endorsement. "It shows how deep
austerity is cutting our most vulnerable when even David Cameron's mum has had
enough," she said. The prime minister previously wrote to the local
authority in his capacity as MP for Witney expressing
"disappointment" at planned cuts to museums, libraries and day
centres for the elderly. But council leader Ian Hudspeth hit back, saying the
cuts were the result of reductions in funding from central government. Members
of Unite employed in early intervention by Oxfordshire County Council will walk
out on strike on February 16 after voting overwhelmingly for industrial action. BBC NEWS
Tory MP, on £74k a year, moves back in with his PARENTS
because he can't afford deposit on a London house
William Wragg, 28, says he is part of the 'clipped wing
generation' of graduates who are forced to go home to save a deposit. Mr Wragg,
a former primary school teacher elected in 2015 to Hazel Grove, Greater
Manchester, says the punishing cost of renting has left him without enough cash
to buy a house. The Tory was born in Stockport, where he lives with mother
Julie, 54, and father Peter, 55, in their suburban semi-detached home. A
quarter of all adults aged between 20 and 34 in the UK - around 2.8milllion
people - are still living with their parents. 'I'm extremely well paid, don't
get me wrong. It is not wage related but I do need a few years at home to save
a deposit... I know exactly what it is like. I have complete empathy with
people in that position,” he said. Critics say his situation will embarrass his
own party because it highlights the lack of affordable housing and high rents
in the UK. The new MP is paid three times more than the average £26,000-a-year
UK salary and can claim expenses for a constituency office and rent for a
second home, either in London or his constituency. But politicians must always
pay for their main home themselves after MPs fiddled their expenses by
'flipping' properties bankrolled by the taxpayer. DAILY MAIL
Payday lenders hit by
changing views, Church says
A "sea change in public and political opinion"
about payday lenders has brought falls in use of these loans, a Church
taskforce has concluded. The report highlighted that payday lending had fallen
by 68% from 2013. Archbishop Justin Welby created the taskforce, led by former
regulator Sir Hector Sants, to promote responsible credit and savings which,
after two years of work, has now published its final report. Since 2013 the
membership of credit unions had grown by 13%, with 123,000 new members in
Britain. The taskforce's report highlighted work to create a credit union for
Church staff, financial advice in churches, and savings clubs in schools. "Although
there are many other influences beside the Church, the Archbishop of
Canterbury's intervention has undoubtedly helped to galvanise broader awareness
of, and support for, credit unions from churches and wider society and
contributed to a sea change in public and political opinion around payday
lending," the report said. In 2013, the Archbishop of Canterbury told
online lender Wonga that the Church would try to force it out of business by
helping credit unions. But it emerged that the Church of England had indirectly
invested £75,000 in the company. The Church ended its ties with Wonga in 2014. BBC NEWS
Growing teacher
shortages as Government misses recruitment targets
Despite spending £700 million a year on recruiting and
training new teachers, the Government has missed its recruitment targets for
the last four years, according to a new report from the National Audit Office
(NAO). Between 2011 and 2014 the number of teachers leaving the profession
increased by 11 per cent. Secondary schoolteacher training places were the
hardest to fill, with 14 out of 17 secondary subjects with unfilled training
places in 2015/16 compared with just two subjects with unfilled places in
2010/11. Furthermore, there has been a rise in the number of classes being taught
in secondary schools by teachers without a relevant post-A-level qualification.
Citing physics as an example, the NAO revealed that the proportion of classes
taught by a teacher without a qualification in the subject rose from 21 per
cent to 28 per cent in the four years to 2014. The report accused the
Department of Education (DfE) of having a "weak understanding of the
extent of local teacher supply shortages" with particular problems in
disadvantaged areas of the country. TELEGRAPH
US fashion giant Gap
embroiled in British tax bill row
The multinational retailer, which trades on its wholesome
West Coast image, has paid almost no corporation tax — once rebates are taken
into account — since 2011 despite sales of more than £1 billion, according to a
new analysis of its “opaque” accounts. Gap, founded in San Francisco in 1969,
is one of the most familiar presences on the high street with 132 stores and
turnover of more than £300 million a
year. It also owns Banana Republic, which has eight UK outlets. However,
accounts reveal the three British-based Gap companies made net losses between
2012 and last year — allowing the world’s third biggest fashion retailer to
reclaim more than £4.2 million from the taxman and set it against future
profits. The accounts suggest Gap has been shuffling profits between the
businesses and to the parent company in San Francisco. This strategy, although
entirely legal, has reduced its potential liability to HM Revenue and Customs. The
disclosures will add to pressure on Chancellor George Osborne to close
loopholes that allow vast corporations to pay virtually no tax in Britain
despite having huge sales. It follows the huge row last month after it emerged
that Google has struck a “sweetheart” deal with British tax authorities to pay
£130 million in back taxes covering 10 years. Starbucks was found to be paying
a fee to itself in the Netherlands which avoided making a profit in Britain,
while buying coffee beans via a Swiss subsidiary. EVENING STANDARD
EU proposals will
force multinationals to disclose tax arrangements
US multinationals such as Google, Facebook and Amazon will
be forced to publicly disclose their earnings and tax bills in Europe, under
legislation being drafted by the EU executive. The European commission is to
table legislation in early April aimed at making the world’s largest
multinational corporations open their tax arrangements with EU governments to
full public scrutiny. According to three senior EU officials familiar with the
proposals, initial conclusions from an ongoing impact assessment have found in
favour of obliging large corporations to reveal their profits and the tax they
pay in every country in which they operate within the EU. Public
country-by-country reporting is seen as important because without it large
companies are more able to make secretive deals with governments on where and
how they declare their profits. The commission was heavily criticised last
month when it proposed that corporations report only to national tax
authorities in Europe without making the information public. But there have
been some successes. The competition commissioner, Margrethe Vestager, has
already found Starbucks in the Netherlands and Fiat in Luxembourg culpable of
tax avoidance and ordered them to pay €30m (£23m) each in unpaid taxes. Last
month she also ordered 35 multinationals in Belgium to pay €700m in dodged
taxes. Similar investigations are ongoing into Apple in Ireland and Amazon in
Luxembourg. GUARDIAN
French law forbids
food waste by supermarkets
France has become the first country in the world to ban
supermarkets from throwing away or destroying unsold food, forcing them instead
to donate it to charities and food banks. Under a law passed unanimously by the
French senate, large shops will no longer bin good quality food approaching its
best-before date. Charities will be able to give out millions more free meals
each year to people struggling to afford to eat. The law follows a grassroots
campaign in France by shoppers, anti-poverty campaigners and those opposed to
food waste. The campaign, which led to a petition, was started by the
councillor Arash Derambarsh. In December a bill on the issue passed through the
national assembly, having been introduced by the former food industry minister
Guillaume Garot. Campaigners now hope to persuade the EU to adopt similar
legislation across member states. The law has been welcomed by food banks,
which will now begin the task of finding the extra volunteers, lorries,
warehouse and fridge space to deal with an increase in donations from shops and
food companies. In recent years, growing numbers of families, students,
unemployed and homeless people in France have been foraging in supermarket bins
at night to feed themselves. People have been finding edible products thrown
out just as their best-before dates approached. Carrefour, France’s biggest
supermarket group, said it welcomed the law, which would build on food
donations its supermarkets already made. Of the 7.1m tonnes of food wasted in
France annually, 67% is binned by consumers, 15% by restaurants and 11% by
shops. Each year 1.3bn tonnes of food are wasted worldwide. A report published
in 2015 showed that UK households threw away 7m tonnes of food in 2012, enough
to fill London’s Wembley stadium nine times over. Avoidable household food
waste in the UK is associated with 17m tonnes of CO2 emissions annually. GUARDIAN
