Graphs at a glance: Governor of the Bank of England said the housing boom is the greatest threat to the UK recovery. So what are we doing about it?

Does the UK Housing Boom really exist? It's common knowledge that London house prices have ballooned, but is the rest of the UK bubbling up too?

Figures from the Office for National Statistics show this is actually not the case. Since the banker induced economic crisis of 2008 London house prices have rocketed by 40%. UK house prices too have grown by a not insignificant 12%. However this average UK house price rise has been greatly inflated by including London's figures. 

Look at it this way: a company reviews the pay of two staff:

• Joe Minimus gets no payrise
• Felix Maximus gets a £10,000 payrise
• Their average payrise is £10,000 ÷ 2 = £5,000

The company can say it gave its staff an average £5,000 payrise. But strip out Felix's hike, and the reality is Joe got nothing.

If you strip out London house prices, as the ONS has kindly done in the graph below, you discover that in the five and a half years from January 2008 to July 2014 the average house price in the UK excluding London has risen by just 4%. That is about the same as if you put your money in a rip-off deposit account paying less than 1% for the same period of time.


Take an even closer look, and you will see that as at July 2014 house prices in Wales, the North East, the North West, and Yorkshire & Humberside had not even returned to their 2008 values. And Northern Ireland house prices were on average 40% lower than 2008.

House prices in London, together with its hinterlands of the East and South East, have soared away from the rest of the UK. Why? Because that's where the money is. Not just the high paying jobs, but it's also where the government showers public money. From infrastructure (in 2013 London got £5,426 per person, compared to £223 per person in the North East) to the Arts (in 2012/13 London got £68.99 per person, compared to an average of £4.58 for the rest of England), London gets the lion's share.

The London house price bubble is the result of simple supply and demand. People come to London in spite of exorbitant house prices, because that's where the money is. 

In May 2014 Mark Carney, the Governor of the Bank of England, stated:
"The biggest risk to financial stability, and therefore to the durability of the expansion – those risks centre in the housing market"


Carney reckons the booming housing market is the biggest risk to the recovery. Is there a recovery? People believe there is. But a poll done for the Financial Times shows for many it is a matter of belief rather than reality. Even 75% of Tory voters said they have not actually seen signs of recovery, they just believe its probably out there somewhere:

The solution to making more people experience the benefits of and to remove the 'biggest threat' to the recovery is to move the money - the well paying jobs and public investment - out of London to the rest of the UK. 

We should not build new houses and more cramped communities where the jobs are currently. Nor should we pump up London prices by providing mortgage subsidies for bumper borrowing. We should move the jobs to where houses and communities already exist, well outside London.

Perhaps the Scots did us all a favour when they won 'devo-max' and the prospect of an "independent England". An English Parliament based somewhere away from the South East, pursued by all the corporations hungry for government contracts would be a good start to redistributing the prosperity across the UK.

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“Politically motivated” Treasury posts 24m letters, telling you what your Income Tax and NI is being spent on

Fee, KJ and Chris somehow find it in their hearts to forgive Osborne...

SOURCE GUARDIAN: Osborne accused of using new tax statements as ‘political propaganda’

George Osborne has been criticised for sending millions of households annual tax statements that show the biggest chunk of their contribution going towards welfare, with trade unions describing it as “political propaganda masquerading as neutral information”. The letters are being sent – at a cost of £5m – after Osborne signalled that he wanted to make another £12bn of welfare cuts in the next parliament, raising suspicions that he is seeking to soften up voters in order to win political support for further reductions in the benefits budget. The letters are due to fall on to doormats over the next few weeks but the Treasury has quietly dropped plans to provide a further breakdown of benefit spending on the document. The breakdown does not make clear that most of the welfare budget goes to pensioners as well as sick and disabled people. The Treasury originally planned to show that just 3% went towards unemployment benefits, while much larger amounts went to children and families, elderly people and those unable to work. The letters make no mention of VAT, or duty on such things as alcohol and tobacco. Shabana Mahmood, the shadow Treasury minister, said the statements did not show that “families and pensioners are paying more in higher VAT. Independent figures from the IFS [Institute for Fiscal Studies] show that by next year families will be £974 a year worse off because of tax and benefit changes since 2010.”

SOURCE FULL FACT: What you need to know about the Treasury’s tax statement

The treasury says that mailing out individual statements this week telling taxpayers what there money is being spent on is an act of transparency. But are the letters really that clear?

SOURCE: The Office for National Statistic’s Labour Force Survey shows that the number of "full time employees" had not recovered since the 2008 banker induced crash. The 'jobs recovery' is made up mainly of part-time and self-employed jobs.

SOURCE: The Office for Budget Responsibility, a body created by the government to provide independent economic forecasts, shows George Osborne’s current economic strategy will bring government consumption to the smallest share of GDP since before 1948 when the NHS was founded.

SOURCE CITY AM: So much for talk of a 2014 rate hike - Mark Carney says he "expects spring 2015 interest rate rise"

Against his own predictions, the Bank of England governor, Mark Carney, has all but ruled out an interest rate hike this year. In a speech to the Trades Union Congress, he said inflation lower than the Bank's two per cent target, slack in the labour market and downward pressure from strong sterling mean the current inflation environment is "benign". This means no rate hike this year, but the governor thinks spring could be the time: “It [the inflation environment] will not remain benign if we do not increase interest rates prudently as the expansion progresses.” Carney warned that although the UK labour market has recovered, this performance has "come at a cost". He said: “The weakness of pay has, in effect, purchased more job creation. It has not resulted in an unusually high level of profits... The burden of the Great Recession has been shared across the UK. Profits have been squeezed almost as much as labour costs. Employees have seen their real incomes reduced, but more people are in work as a result.” The fall in real wages since the crisis is the greatest such drop since the 1920s.

SOURCE HUFFINGTON POST: Bank of England Admits Plans To Cool Housing Market Will Have 'Minimal' Impact

Bank of England governor Mark Carney told reporters that the housing market remained the "biggest threat" to Britain's recovery, insisting that the Bank's Financial Policy Committee (FPC) "could not control house prices". He said that the Bank was acting pre-emptively in a "graduated and proportionate" response and that lenders were "on notice". In an apparent reversal of his earlier predictions, Carney appeared to play down the prospect of imminent interest rate rises when he appeared before the Treasury Select Committee this week. Carney had indicated in his recent Mansion House speech that the first interest rate rise may come "sooner than markets currently expect", leading many observers to speculate it could arrive by the end of this year. Labour's Pat McFadden told him: "It strikes me the Bank is behaving a bit like an unreliable boyfriend - one day hot, one day cold - and the people on the other side of the message are left not really knowing where they stand."

OUR RELATED STORIES:

The shift from full to part time explains 80%+ of the UK's 1m new jobs

Why do both the Conservatives and Labour push so hard for cuts to taxes and public spending when the British Social Attitudes Survey shows only 1 in 10 Brits want this?

Graphs at a glance: The great middle-income tax hustle: Since 2010 1.4 million people earning over £42k have had their marginal income tax rate doubled from 20% to 40%

UK banks Payment Protection Insurance (PPI) scam compensation fund reaches £20billion. A swindle big enough to pay all their Corporation Tax for years

Global corporate and super-rich tax dodging in numbers (and a cool animation)

It's NOT good capitalism when one company pays its taxes and its rival dodges them

Pirate enterprise: Britain controls 9 overseas tax havens

Graphs at a glance: 9,836 prosecutions for benefit fraud v 617 for tax fraud. Yet benefit fraud costs us a fraction of tax fraud

Financial services corporation tax only contributes only 2% of UK tax revenues

Read how companies use "inter-country" ruses to dodge tax

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Rip-off News round-up. Our pick of the last week's media (Thu 7th November)

MPs to escape expenses investigations after paperwork destroyed by Parliament

John Bercow, the Speaker, faces accusations he has presided over a fresh cover-up of MPs' expenses after tens of thousands of pieces of paperwork relating to claims made before 2010 were shredded. Members of the public who have written to Kathryn Hudson, the standards watchdog, to raise concerns about their MP’s claims have been told there can now be no investigation due to lack of evidence. Under the House of Commons' "Authorised Records Disposal Practice", which is overseen by Mr Bercow’s committee, records of MPs’ expenses claims are destroyed after three years. The move is necessary to comply with data protection laws, a Commons spokesman said. However, under that same set of guidelines, the pay, discipline and sickness records of Commons staff are kept until their 100th birthday. Health and safety records are kept for up to 40 years, while thousands of other classes of official documents on the day-to-day running of the House are stored indefinitely in the Parliamentary Archive. The shredding of the claims records means that “cold case” investigations like that into Maria Miller, the former Culture Secretary, by the expenses watchdog are now unlikely. In April Mrs Miller was forced to resign from the Cabinet and apologise to the Commons after Mrs Hudson ruled she had wrongly claimed thousands of pounds in mortgage payments between 2005 and 2009 on a home occupied by her parents. TELEGRAPH

Rail ticket 'rip-off': Self-service machines routinely denied cheapest fares to passengers

Self-service machines — which are used to purchase almost a quarter of all tickets sold annually — offer wildly different fares. Customers buying from a machine can pay more than £200 when a ticket for the same destination can be found elsewhere at the station for more than £100 cheaper. For example, at machines run by train company Northern Rail in Leeds, passengers buying a First-Class Anytime Return to Birmingham were charged £271. Only feet away, an East Coast trains machine offered the same journey using a First-Class Off-peak Return for £145.70. This type of ticket is not available for customers using Northern Rail’s machines, which means that some passengers might not be aware that they could save £125.30 by travelling off-peak. The investigation also found that many machines promote expensive fares, bury cheaper options and do not apply discounts for groups or families. Since 2004, the proportion of passenger revenue collected by machines has grown from just seven to 21 percent. Rail travel is at record levels with 1.59 billion journeys recorded in 2013-2014. In 2011, Theresa Villiers, as transport minister, condemned rail companies over how difficult ticket machines were to use and challenged the industry to clean up its act. But The Telegraph investigation examined rail fares across the country and found that customers were being offered different prices for the same journey depending on which operator’s machine they used. TELEGRAPH

NHS cuts: spending on agency nurses soars past £5.5bn

NHS spending on agency nurses and staff has spiralled to more than £5.5bn over the past four years and is continuing to rise amid a debilitating recruitment crisis in the health service. Budgets for temporary staff this financial year have already been blown apart, it can be revealed, with spending in some parts of the NHS running at twice the planned figure. Reliance on agencies – at a cost of up to £1,800 per day per nurse – comes as the number of nurse training places in England has been cut. In the last year of the Labour government, 20,829 nurse training positions were filled in England. That fell to 17,741 in 2011-12 and to 17,219 in 2012-13, rising to 18,009 in 2013-14. According to the latest figures, there were 7,000 fewer qualified nurses in August 2013 compared with May 2010, excluding health visitors, school nurses and midwives. Ministers were accused on Saturday of “truly incompetent planning” by the Royal College of Nurses. GUARDIAN

Pay rise for 60,000 workers after surge in firms signing up to living wage

More than 1,000 companies are now committed to paying the living wage or above, securing tens of millions of pounds in extra pay for the working poor. They join a host of leading companies, including Google, Barclays, Goldman Sachs, ITV and Legal & General, in making the commitment to be a living wage employer, remunerating all employees well beyond the legally enforced £6.50 national minimum wage. The surge in numbers, and the burgeoning campaign to lift the pay of the worst-off, means that about 60,000 people will be given a pay rise. The living wage rate rose this month to £9.15 in London and £7.85 elsewhere. In 2013, 432 companies were accredited by the Living Wage Foundation, a part of the community organisation Citizens UK. That figure has now more than doubled, as hundreds of other organisations, charities and businesses have signed up. The Department of Energy and Climate Change pledged on Friday that all its subcontractors would pay the living wage, becoming the first Whitehall department to be formally accredited by the foundation. In contrast, the Department for Environment, Food and Rural Affairs,  and HM Revenue and Customs (HMRC), continue to refuse to ensure that all their subcontracted staff are paid the living wage. An independent evaluation of the living wage initiative funded by Trust for London calculates that by September 2013 the living wage campaign had generated £48m in additional wages for 23,000 low-paid workers. The huge increase in accredited companies since then means those “gains have significantly increased”. The proportion of employees on less than the living wage is 22%, up from 21% last year, says the study. In real terms, that is a rise of 147,000 people to 5.28 million. GUARDIAN

Britain's bosses call on Government to stop 'ducking' big questions' and invest in 'crumbling' infrastructure

The nation’s bosses urged the Government to deliver significant improvements to everything from roads and runways to energy supply and broadband. They also called for the creation of an independent infrastructure authority to take politics out of the decision-making process. Two separate reports on the matter, by the CBI lobby group and manufacturing organisation EEF, were released amid signs that business confidence is wavering as the economic recovery slows. The CBI’s survey of 443 senior business leaders found that 67 per cent expect energy infrastructure to worsen over the next five years while 57 per cent fear the same over transport. More than 90 per cent said ‘political uncertainty’ and ‘political rhetoric’ – such as Labour leader Ed Miliband’s pledge to freeze energy prices – was damaging confidence and discouraging investment. Katja Hall, deputy director general of the CBI, said: ‘Progress on infrastructure has been a case of two steps forward and three steps back for far too long. ‘Politicians are too often seen as ducking the big, politically difficult questions looming large on businesses’ risk register, rather than grasping the nettle... Where hard decisions have been taken on issues like energy, populist political rhetoric threatens to send us backwards... We’re at a crossroads. We also need to see bold thinking and a renewal of the politics of infrastructure, finding a new way to agree upon and then consistently deliver the improvements we’ll need over the next 50 years - not just the next five.’ DAILY MAIL

Low pay court victory: Your overtime should count in holiday pay

Workers have won a ground-breaking case at the Employment Appeal Tribunal to include overtime in holiday pay. Your holiday pay entitlement is normally calculated from your contractually guaranteed basic pay, which does not including your overtime. The case was brought by staff for whom overtime has become normal practice, claiming that holiday pay should be based on contractual and overtime pay combined. 1 in 6 working people do voluntary or compulsory overtime. The ruling means some people working overtime could claim for additional holiday pay. The tribunal also ruled that workers can make backdated claims, but only for a limited period. The ruling has widespread implications for companies where staff are required to do overtime as a regular part of their job. The government and business groups had argued strongly that overtime should not be included in holiday pay calculations. They were particularly concerned about a raft of back payments potentially going back many years. But backdated claims have been limited, with the tribunal ruling that employees cannot claim more than three months after the last incorrect payment. BBC NEWS

Legal aid cuts: Government ‘washing its hands’ of vulnerable parents, says judge

In what amounts to a confrontation between the judiciary and the executive over who controls spending in the courts, Sir James Munby, president of the family division, has handed down a judgment saying “some state agency” should pay the costs of legal representation in a case. It is the second time that Munby has threatened to order the courts service to pay for legal representation that parliament has explicitly withdrawn. In August, he warned the Ministry of Justice in the parental access case of Q v Q that costs would have to be borne by Her Majesty’s Courts & Tribunals Service (HMCTS) if a father’s right to a fair trial were to be upheld. The language in the latest judgment, known simply as “In the Matter of D (A Child)”, goes even further. It relates to the removal of a child by Swindon borough council from his parents, both of whom have learning difficulties. Munby explained: “What I have to grapple with is the profoundly disturbing fact that the parents do not qualify for legal aid but lack the financial resources to pay for legal representation in circumstances where, to speak plainly, it is unthinkable that they should have to face the local authority’s application without proper representation.” GUARDIAN

Supermarket staff demand payments, totalling billions, from suppliers for an 'easy' bonus

One-off payments demanded by supermarkets from suppliers could contribute billions more to profits than previously thought, sources have told the Mail on Sunday. Supermarket demands for such payments are also too closely tied to their buying staff’s individual bonuses, putting at risk supplier relationships, industry experts have warned. Tesco said two weeks ago it had a £263million black hole in its accounts relating to supplier payments known as ‘commercial income’. The period when the accounting scandal began remains a grey area, but its timing ties in closely with the point at which bonus payments to staff at the supermarket came under severe pressure. One former supermarket buyer told The Mail on Sunday that pressure on buying teams to find extra income from suppliers rose when it became clear other revenue targets would not be met.  He said: ‘When you’re struggling, you have crunch points twice a year – at the half-year and year-end. The emails begin to fly and phone calls are made. Sooner or later, you might find your commercial income becomes a bigger portion of your profits than your basic trading margin.’ Duncan Swift, insolvency partner at accountancy firm Moore Stephens, which advises cash-strapped supermarket suppliers, likened the bonus culture at Britain’s big supermarkets to that of banks, saying extra payments were ‘very easy’ to levy from suppliers. He said in tough trading times it was ‘15 times more attractive’ to demand £1million from suppliers than make an extra £1million profit from sales of produce. According to Moore Stephens’ analysis, Britain’s top ten supermarkets owe about £15billion to suppliers for goods at any one time, giving them leverage to negotiate extra payments. It estimates commercial income levied by Tesco, Sainsbury’s, Asda and Morrisons could be £5 billion a year. DAILY MAIL

Royal Bank of Scotland sets aside £400m for forex-rigging fines

Further evidence that banks are bracing for stiff penalties for rigging currency markets emerged on Friday after Royal Bank of Scotland set aside £400m to cover the cost of the investigation into the £3.5tn-a-day market. There are expectations that HSBC will incur a similar charge, which would come on top of moves by Barclays, US banks Citigroup and JP Morgan and Swiss bank UBS to put hundreds of millions of pounds aside to cover penalties from regulators in the US and Britain. The decision to allocate funds indicates the banks’ belief that the penalties could be imposed soon, with the UK’s Financial Conduct Authority and its US counterparts expected to announce a coordinated settlement with up to six banks next month. RBS, which is 81% owned by the taxpayer, also added £100m to its provisions to cover the cost of mis-selling payment protection insurance. It follows responses by other high-street banks to increased applications for compensation in the costliest mis-selling scandal in history. Another £180m was earmarked by RBS for other penalties including the IT meltdown in 2012, which left customers locked out of their accounts, including those at Ulster Bank who were affected for more than three weeks. GUARDIAN

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Graphs at a glance: Oxford University study predicts nearly half of jobs will be replaced by computers in the next 10-20 years.

We Britons are an optimistic bunch. The graph below by Glassdoor, a recruitment company, shows we  consistently believe our work colleagues are much more likely to get fired than we are.

Graph by Glassdoor

Is it this native optimism that encourages politicians to cut public services and rip up safety nets for the unemployed and the disabled? Because we are so confident we ourselves won't need them?

If so, our confidence is sorely misplaced. Office for National Statistics figures show how the UK manufacturing industry collapsed between 1979 and 2013, with 60% of all manufacturing jobs disappearing:

If you are heaving a sigh of relief that you aren't employed in manufacturing, hold that sigh!


A study done at Oxford University states that nearly half of all jobs are at a high risk of disappearing over the next two decades due to computerisation.

The colours in the graph represent different occupations:

The graph shows the following occupations with a high (more than 70%) probability of being wiped out: 

• Office & Administrative Support
• Sales & Related
• Service

And shows the following with a high probability of surviving: 

• Healthcare, Practioners & Technical
• Education, Legal, Community Service, Arts, and Media
• Management, Business and Financial

Of course as some occupations are extinguished others are created. However, according to figures by the TUC in the period between 2010 and 2013 nearly eighty percent of net job creation "has taken place in industries where the average wage is less than £7.95 an hour". 
 
Like slowly boiling a frog in a pan of water, the government hopes to cut adrift those who rely on public services without them noticing it. 

The government knows that with growing inequality more and more people will need public support. Something they would rather cut away before the voters notice.

Most people don't need a hospital today. But most will need a hospital one day, for themselves or their loved ones. Most people don't need an income top-up today in the form of state benefits and pensions, but most will need it one day.

Beware of voting in governments who would give away your rights to public services and support. They are your inherited rights just as much as a landlord has the right to receive rent on his or her inherited properties. 

In a society of growing inequality, once these rights are gone all that will be left is the charity of the unequally wealthy. What you receive by right you will only get by going cap in hand.

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Rip-off News round-up. Our pick of the last week's media (Thu 30th October)

Does Osborne realise? Probably! Ipsos Mori poll shows 1 in 8 will cash in pension pot under reforms 
More than 200,000 people will cash their entire pension pot when the government reforms take effect next year, with one in five planning to use their savings to fund a holiday, a study has found. From April, workers over 55 will be able to use their pensions like bank accounts and withdraw thousands of pounds to save, invest or spend as they wish. The change builds on the pension reforms Mr Osborne announced in his Budget, under which he scrapped rules that force most Britons to use their pension savings to buy an annuity. At the time, ministers emphasised that pensioners would be able to draw down the entirety of their pension pots to save, invest in property or even buy a Lamborghini. But Tom McPhail, head of pension research at Ipsos Mori, said that the poll showed people were underestimating the amount of tax they would have to pay despite the reforms, as only 25 per cent of each lump is tax free and the rest is taxed at a marginal rate. The withdrawals could land the taxman with a £1.6billion windfall. The poll found that those wanting to cash in their savings were most likely spend the money on holidays, with one in five saying that is how they would use the cash. Another 12 per cent said they would use it for DIY projects, 14 per cent to help their children and eight said they would spend some on new cars. One in four said they would save a portion of the money, whilst 13 per cent would use some of it to pay off existing debts. Investment in property would be the main reason to cash in their savings for 16 per cent, the survey found. Critics have questioned whether people could end up struggling financially if they spend all their money after retiring. TELEGRAPH

“Outrageous conduct”: City facing more than ‘a few bad apples’, says Bank of England deputy governor

Minouche Shafik, the deputy governor for markets and banking, said the industry urgently needed to come forward with its own proposals to reform a system recently tarnished by allegations of the rigging of foreign exchange trading. She warned that bad practices in markets may be re-emerging as memories of prior scandals fade. She said much had been done to strengthen the financial system, but some of the benefits were “offset by a long tail of outrageous conduct cases. These are like salt rubbed into the wounds to public confidence in financial markets.” Ms Shafik is overseeing the UK Fair and Effective Markets Review, launched by chancellor George Osborne over the summer after allegations that traders had rigged interest-rate and currency benchmarks. The scandals have damaged Britain’s reputation as a key global financial capital. A consultation paper by the Bank, Treasury and Financial Conduct Authority, launched on Monday, raises the prospect of tougher penalties on staff who breach internal guidelines, more intrusive electronic surveillance of trading floors and more established procedures for protecting whistleblowers. But it also considers harsher regulation including imposing higher capital charges on firms that fall foul of rules. It also floats the idea of extending the UK’s bonus clawback rules from banks to non-banks such as asset managers and trading firms. The review said regulators should have the power to police seven key financial benchmarks, including those governing oil, precious metals and foreign exchange. In the paper, the review asked whether there was a need to strengthen criminal sanctions in fixed interest, currency and commodity (FICC) markets, as well as to introduce punishments such as temporarily suspending firms’ or individuals’ permissions to trade in certain markets. FINANCIAL TIMES

Sports Direct forced to spell out zero-hours workers' rights in their job adverts

Zahera Gabriel-Abraham launched the case after taking a zero-hours contract with Sports Direct which she says did not make clear that she might not be offered work with the business. She also claimed that she was told she would not receive holiday pay. She resigned saying her health was suffering because the threat of not being given any work some weeks was making her ill. Mike Ashley’s Sports Direct high street chain has now reached a settlement with Ms Gabriel-Abraham. About 20,000 of Sports Direct’s 23,000 staff are employed on zero-hours contracts and reaching a settlement with such a large business means it will resonate around the industry. Unusually for a settlement, the claimant did not agree to be gagged from speaking out about it as a condition of striking a deal. “Zahera wanted to make a difference and in order to do that she would not agree that it would be secret,” said Elizabeth George, a barrister at Leigh Day which represented Ms Gabriel-Abraham. “This is a significant step in the right direction. It will be interesting if other companies are more upfront about the contracts as a result.” Ms George added: “The new adverts have to state three things: hours are not guaranteed, they may vary and there may be weeks when no work is offered. “They are not going to be the most attractive job adverts: ‘Come work for us and there’s no guarantee you will get any work.’” TELEGRAPH

Asda faces mass legal action over equal pay for women

Asda, the UK's second largest retailer, is facing a mass legal action by women who work in their stores. The women claim they are not paid the same as male workers in the distribution warehouses - despite their jobs being of "equivalent value". One Asda store worker said that the work was the same whether you were in the shop or in the warehouse - packing and unpacking pallets of clothes and food and putting stock on shelves, often through the night. The legal firm managing the case, Leigh Day, says it has already received 19,000 enquiries from current or former Asda staff in relation to the group legal action. The case will test how retailers decide what they pay their staff in different parts of their business. And if the women are successful it could have serious ramifications for the whole sector. Lauren Loughheed, the solicitor with Leigh Day who is leading the case, said that the pay difference between shop and warehouse workers could be as much as £4 an hour. That's a big difference when you are earning £7 an hour. And, if the cases are successful, women workers could be compensated for six years of back pay. The legal action, believed to be the largest of its kind in the private sector, could lead to some very high payouts. In the public sector, the issue has led to major battles between councils and their workers. Women who worked as cleaners and school catering staff have taken hundreds of class actions to close pay differentials with men who had jobs such as refuse collector or street cleaner. One council, Birmingham, has agreed to pay over £1bn to settle the claims of tens of thousands of women which go back over many years. Ms Lougheed said that the private sector had been slower to act and that this test case could prove a watershed. Asda has signalled it will fight the claims vigorously and says it does not discriminate. BBC NEWS

London gets 24 times as much spent on infrastructure per resident than north-east England

Figures derived from a research report by IPPR, show Londoners receive around ten times more per head spent on capital investment than the rest of England – a discrepancy sure to reignite a long-running row on whether London’s growth is coming at the detriment of the rest of the UK. In August the UK chancellor George Osborne endorsed a £15bn plan to improve infrastructure in five northern cities this week. Although he did not commit to any funding, Osborne said the overall aim was: “To end the imbalance in the UK economy so our success is not wholly dependent on the global city of London, so we have across the north of England individual cities that are better connected, have a better quality of life, and are able to create.” Comparing London and the North, London’s Crossrail alone is earmarked to receive nine times more funding than all the rail projects from the North’s three regions combined. Other projects in the capital including tube improvements mean that £5,426 will have been spent on each resident of London compared to £223 on those in the north-east region. That’s over 24 times as much. GUARDIAN

Cameron hails plan to fast-track devolution for English cities

The prime minister has welcomed an ambitious proposal to devolve power to UK city regions along the same brisk timetable as the Scottish devolution process, suggesting Greater Manchester and West Yorkshire could gain more autonomy in 2015. The report from the City Growth Commission argues that devolution from Whitehall to city regions will boost economic output in the UK’s 15 largest metropolitan areas (“metros”) by £79bn per year – approaching 5% of current GDP. It also proposes a vastly improved transport network in the north of England across the Pennines, including a northern answer to London’s Oyster card – dubbed the “Noyster”. Praising the report as “absolutely first class”, David Cameron told Prime Minister’s Questions on Wednesday that there was a “real opportunity” to rebalance the economy using high speed rail and other infrastructure to “link up our great northern cities” and create a “northern powerhouse”. The report was welcomed by business people and political leaders in the 15 “metros” singled out in the report: London, Greater Manchester, West Midlands, West Yorkshire, Glasgow, Merseyside, Tyne and Wear, South Yorkshire, East Midlands, South Hampshire, Edinburgh, Cardiff, Bristol, Belfast and Leicester. But smaller cities, like Hull, Peterborough and Carlisle, expressed concern that they will be left out. GUARDIAN

Yorkshire BS to refund thousands after it is fined £4.1m for mistreating customers struggling to pay their mortgage

When a customer phones any mortgage provider to explain they are having problems meeting their payments, the lender should seek to understand the root cause of the borrowers' inability to pay. They should then look into their income and expenditure to establish what the borrower can afford to pay. The lender should also consider all the options for forbearance available to the borrower. All this should happen as quickly as possible so that the borrower does not fall further into financial difficulty. But the Financial Conduct Authority (FCA) found that between October 2011 and July 2012, call handlers at YBS failed to follow these guidelines. The FCA issued the fine after it found the mortgage provider sometimes took months to come up with a repayment solution to help customers in arrears. In the meantime, these borrowers accrued extra interest and late payment fees at a time when they could ill-afford them. As many as 33,900 customers will also be repaid a total of £8.4million after YBS agreed to refund all mortgage arrears fees – plus interest – charged to customers since January 2009. Customers will receive an average of £247 each. YBS has also stopped charging mortgage arrears fees until the identified issues are resolved. DAILY MAIL

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Londoners get around ten times more of taxpayers’ money spent per head on capital investment than the rest of England

SOURCE GUARDIAN: London gets 24 times as much spent on infrastructure per resident than north-east England

Figures derived from a research report by IPPR, show Londoners receive around ten times more per head spent on capital investment than the rest of England – a discrepancy sure to reignite a long-running row on whether London’s growth is coming at the detriment of the rest of the UK. In August the UK chancellor George Osborne endorsed a £15bn plan to improve infrastructure in five northern cities this week. Although he did not commit to any funding, Osborne said the overall aim was: “To end the imbalance in the UK economy so our success is not wholly dependent on the global city of London, so we have across the north of England individual cities that are better connected, have a better quality of life, and are able to create.” Comparing London and the North, London’s Crossrail alone is earmarked to receive nine times more funding than all the rail projects from the North’s three regions combined. Other projects in the capital including tube improvements mean that £5,426 will have been spent on each resident of London compared to £223 on those in the north-east region (i.e. over 24 times as much).

SOURCE GUARDIAN: Cameron hails plan to fast-track devolution for English cities

The prime minister has welcomed an ambitious proposal to devolve power to UK city regions along the same brisk timetable as the Scottish devolution process, suggesting Greater Manchester and West Yorkshire could gain more autonomy in 2015. The report from the City Growth Commission argues that devolution from Whitehall to city regions will boost economic output in the UK’s 15 largest metropolitan areas (“metros”) by £79bn per year – approaching 5% of current GDP. It also proposes a vastly improved transport network in the north of England across the Pennines, including a northern answer to London’s Oyster card – dubbed the “Noyster”. Praising the report as “absolutely first class”, David Cameron told Prime Minister’s Questions on Wednesday that there was a “real opportunity” to rebalance the economy using high speed rail and other infrastructure to “link up our great northern cities” and create a “northern powerhouse”. The report was welcomed by business people and political leaders in the 15 “metros” singled out in the report: London, Greater Manchester, West Midlands, West Yorkshire, Glasgow, Merseyside, Tyne and Wear, South Yorkshire, East Midlands, South Hampshire, Edinburgh, Cardiff, Bristol, Belfast and Leicester. But smaller cities, like Hull, Peterborough and Carlisle, expressed concern that they will be left out.

OUR RELATED STORIES:

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

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The most fearsome beast in the political jungle is you, the voter. Now is the time to wake up and roar!

A long game is being played on the British public by the political classes. It is a game aimed at reducing our personal expectations from life in Britain. It started with the Tories in 1979, and continued through Labour and Coalition governments since then. 

The game was played quite subtly until the banker induced crash in 2008, but since then all the delicacy has been dropped. Not because the banker crash created a crisis, but because it created a cover.


In recent years we have seen wage freezes, benefits cuts, and the erosion of our pensions. Our access to legal aid has been sliced. Employment protections and the right to strike are being attacked. Services from libraries and public parks to police officers and defence are being scrapped. We now get unqualified teachers in “free schools”; unqualified translators and under-qualified barristers in the legal aid system; paramedics doing what doctorsused to do; reservists doing what the professional army used to do. 

Even our expectations of being able to sit down are to be cut. The Department of Transport is buying new trains where only two in five passengers will have a seat on journeys exceeding an hour. Naturally we are told every time something is taken away it is done for our own good. A railway spokesman said about the seat reductions:

"[It] ensures people can get on and off in under 30 seconds in central London"

Apparently the inconvenience of standing for over an hour is a price well worth paying if you can get off in 30 seconds. Certainly it is worth it for the train companies, who can pack us tighter into a carriage with fewer seats and more standing room. 


Now our expectations of family health provision are being realigned. Rather than expecting to get care from our GPs, we are being retrained to go to the chemist when we are feeling poorly. 

Some justify this claiming there is a crisis recruiting GPs because the job is so dreadful. They assert it would be sensible for us to take the pressure off the stressed doctors, and go to a chemist instead. However, a report by the Health and Social Care Information Centre (a government body) shows that in the 10 years up to 2013 the number of GPs has more than kept up with growth in the population. The report states for 2013:

• There are 40,236 headcount General Practitioners, a decrease of 29 (0.1%) since 2012 and a rise of 6,672 (19.9%) since 2003 (an average annual increase of 1.8%).
• This represents 36,294 Full Time Equivalent (FTE) GPs, an increase of 423 (1.2%) since 2012 and an increase of 6,209 (20.6%) since 2003 (an average annual increase of 1.9%).

[According to the World Bank the UK population has grown by about 0.8% per year. Therefore the number of GPs has grown twice as fast as the population.]

The real reason for pushing us out of GP surgeries into the local chemist is cost. A study by the Royal Pharmaceutical Society, the professional body for pharmacists, stated the cost of treating 'common ailments' was:

• £29.30 per patient at a chemist
• £82.34 per patient at a GP surgery
• £147.09 per patient at a hospital A&E (who took the strain when GPs stopped out-of-hours work)

GPs are presumably too clever to think the objective here is to reduce their workload. Once their workload is reduced, the government will reduce them.

The Government comes up with all sorts of ruses to claim there is plenty of money in the system regardless of the cuts. The most hackneyed being unspecified 'efficiency savings'. At least Jeremy Hunt, Secretary of State for Health, showed a bit more imagination helpfully pointing to billions of pounds worth of extra health services that could be had without spending a penny more, by having fewer mishaps in hospital:

"I talked about how unsafe care is costing the NHS between £1bn and £2.5bn each year – money that could be invested in more front line staff, better training, better equipment and more time for you to care."

Hunt even provided a helpful poster one can print and stick up - click >>here<< - just in case the doctors and nurses felt like tripping over a misplaced patient.

The government asserts that cuts are needed to pay off the costs of rescuing the banks. However government protestations of austerity were undermined in October 2014 by their promised £7 billion tax giveaway so long as they won the next election, and by the EU's €2.1 billion surcharge imposed due to Britain's economy doing better than had been thought. Credit Suisse's annual Global Wealth Report for 2014 also shows the UK top of household wealth growth, and second only to the USA for national wealth growth. 

Credit Suisse

The reality is all these cuts are not a short term measure to get over a temporary problem with public debt. The cuts are a permanent removal of public services, with the objective of permanently reducing taxes. A graph from the Office of Budget Responsibility (OBR), a body created by the government to provide independent economic forecasts, shines a light on this. The graph shows George Osborne’s current economic strategy will bring government consumption to the smallest share of GDP since before 1948 when the NHS was founded. 

Office of Budget Responsibility "Economic and Fiscal Outlook December 2013"

Those who point out the top 1% of earners pay a third of all income tax (making up about 10% of all taxes) dodge a couple of key questions:

1) If the top 1% pay a disproportionate share of taxes, then tax cuts will disproportionately benefit the top 1%. Why should the other 99% vote for that?

2) Why does the top 1% get such a disproportionately large share of income in the first place, that they have to pay those disproportionate taxes? You could reduce the proportion of income tax paid by the top 1% by paying them less and paying everyone else more!

The answer to the second question is apparently that market forces set pay. The most powerful force in the market doesn't realise its strength: it is the voter.

Public policy should have as a prime objective social justice for the general public, from the highest to the lowest. This is what provides the balance that makes Capitalism into a true success. Successful Capitalism allows even excessive pay and prices but balances that with taxation and public services. 

Capitalism gives rewards to the strong. Voters are strong.

It is for the voter to take the advice of Adam Smith, that Capitalist icon: Don't depend on the benevolence of others. Our polarised political parties have neglected their voters, confident that they have nowhere else to go. With UKIP in the south and the SNP in the north, things are changing.

Let the political parties know that you will vote for the party that will look after you! And if they don't deliver what they promise, then make it evident you will punish them the next time you are at a ballot box.

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Rip-off News round-up. Our pick of the last week's media (Thu 23rd October)

Chair of the US Federal Reserve Janet Yellen says income inequality is un-American

Yellen suggested that such a trend, unaddressed, was contrary to the founding principles of the United States. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity,” she said. She also cited the “Great Gatsby curve,” – “the finding that, among advanced economies, greater income inequality is associated with diminished intergenerational mobility”. Yellen’s comments dovetail with concerns about inequality among other global central bankers. Yves Mersch, the governor of the central bank of Luxembourg, took a stand this morning against massive stimulus measures from the Federal Reserve and the European Central Bank, on the reasoning that they widen the gap between the rich and poor. Separately, Treasury Secretary Jack Lew recently encouraged the World Bank to address inequality in developing economies. The strong tone of Yellen’s speech adds to the increasing discussion around economic inequality that was first popularized by the Occupy movement and then crystallized in the blockbuster success of Thomas Piketty’s Capital in the 21st Century, which posited in part that invested and inherited wealth will always accumulate faster than general economic growth. Yellen cited Piketty’s book and his other work with his frequent research partner, Emmanuel Saez. GUARDIAN

Institute of Directors backs TUC claim for higher wages

Christian May, head of campaigns at the IoD, said: “We have sympathy with the TUC’s argument because it remains the case that too many people are still feeling the effects of the recession more keenly than the benefits of the recovery.” “When the TUC protests about the pay gap between bosses and workers, remember they are not talking about business in general, but about a tiny number of people who run the world’s biggest firms. The boards of these companies can no longer be deaf to public opinion,” said May. He said pay rises were “on the cards” for employees of small- and medium-sized businesses. The IoD said that the majority of the lobby group’s members earned £100,000 a year. While this was a “significant amount” it was “nothing like the astronomical sums paid to some of the very top bosses”, said May. The average annual pay of a FTSE 100 chief executive, according to a recent study by Incomes Data Services, is now £3m. GUARDIAN

Pay protests bring tens of thousands onto UK city streets

Leaders of some of the UK's biggest trade unions criticised the government, saying pay had fallen despite the economic upturn. The TUC says average wages have fallen by £50 a week in real terms since 2008. Dave Prentis, general secretary of the Unison union, said "Our members didn't cause this recession, our members didn't cause the failures of the banks." Len McCluskey, general secretary of the Unite union, said Labour should support workers by offering a "clear socialist alternative" to the Conservatives at the next election. "I say to Labour - stop being scared of your own shadow. Don't shrink what you offer the British people," he said. Public sector workers including teachers, nurses, civil servants and hospital workers were among those taking part in the protests, alongside rail and postal workers and others from private firms. The marches come after industrial action by health workers on Monday - the first strike over pay in the NHS since the 1980s and the first time midwives had ever taken action. The government says pay restraint has safeguarded jobs and services. BBC NEWS

We'll sue if you flout crackdown on bankers’ bonuses, EU tells Bank of England

The European Banking Authority’s most senior executive, Adam Farkas, raised the prospect of court action after the Deputy Governor of the Bank of England described the European Union’s bonus cap as ‘the wrong policy’. All of Britain’s leading banks have attempted to sidestep the European rules by offering senior staff extra payments, called either allowances or ‘role-based’ payments. Now the decision of the EBA on Wednesday has effectively ruled that these are bonuses under another name. The European Union passed a directive earlier this year requiring banks to cap bonuses at 100 per cent of a banker’s salary or 200 per cent if they can get prior approval from shareholders. Chancellor George Osborne opposed the directive from the start and is challenging the law in the European Courts. All the major UK banks are now paying their staff allowances. HSBC boss Stuart Gulliver gets £1.7 million a year in shares quarterly, on top of his pay and annual bonus. Barclays calls its allowances ‘role-based pay’ and is handing £950,000 in this form to boss Antony Jenkins this year. Barclays executives get this quarterly in shares. More junior staff receive cash sums monthly. Lloyds boss Antonio Horta-Osorio was awarded a fixed allowance of £900,000 for 2014, which he will receive in share awards over the next five years. RBS’s chief executive Ross McEwan is the only major bank boss to not receive an allowance this year – but his bank will still pay other executives and dozens of other senior bankers in the new format. The British Bankers’ Association estimates that 35,000 of Europe’s bankers will be affected by the bonus cap, two-thirds of them in the UK. DAILY MAIL

Bank of England tells bankers to get used to lower pay

Bank of England deputy governor Jon Cunliffe said banker pay had failed to adjust sufficiently since the crisis. "It is unlikely that we will see, or want to see again, the returns on equity that we saw before the crisis. In the new world, paybills may well have further to adjust," he said. Mr Cunliffe said banking staff had been receiving "a larger share of a smaller pie" relative to shareholders. At global banks, profits attributable to shareholders averaged 60% of the pay bill in 2007, but by 2013 this had fallen to around 25% of the pay bill, he said. It is important, he said, that in seeking to restore returns, "banks and investors do not think in terms of 'back to the future'". BBC NEWS

US crackdown on corporate “inversion” tax dodge means AbbVie withdraws bid for Shire

The US drugs group AbbVie has pulled out of its proposed $54bn (£34bn) takeover of Britain’s Shire after the Obama administration introduced rules to clamp down on overseas acquisitions driven by tax avoidance. The Chicago-based company had planned to shift its tax base from the US to Britain as part of the deal to cut its corporation tax rate from 22% to 13% by 2016. The deal is the biggest to be scuttled by the White House’s clampdown on so-called tax inversions by US companies buying overseas to secure a lower tax rate. US Treasury officials unveiled new rules last month to make it harder for US companies to complete tax inversion deals. The measures bar companies from using cash held overseas to fund such takeovers. Burger King’s planned $11bn purchase of Canadian coffee and doughnut chain Tim Hortons reignited the furore over inversions, which Barack Obama has said are unpatriotic. Other US companies looking to redomicile abroad to save tax include Pfizer, whose £69bn attempt to buy AstraZeneca, Britain’s second-largest pharmaceutical firm, failed in May. GUARDIAN

Price comparison sites hiding best energy deals, claims rival

The Big Deal has written to the five websites - uSwitch, Compare the Market, MoneySuperMarket, Go Compare and Confused.com - to complain. It said all five use a mechanism on their site that asks consumers if they want to switch immediately. By clicking "yes" to that question, all the deals that do not earn the company a commission are filtered out. Only if a consumer clicks "no" are they shown other deals, which can be cheaper. Overall it said that almost a third of energy deals get hidden in this way. The Big Deal has also written to complain to the Competition and Markets Authority (CMA), which is already carrying out a review of the energy market. Most of the websites involved told the BBC that they also adhere to Ofgem's Consumer Confidence code, designed to protect people switching. However Ofgem said it was already working on plans to change its code, so that customers are able to view all the tariffs, regardless of the commission the website will earn. BBC NEWS

Cost of dying sees biggest jump in six years to £8,427

The average cost of dying has soared by 10.6% to £8,427 – seven times the rate of inflation and the biggest jump in six years – according to the latest annual research for an ongoing major study. The analysis from insurance company Sun Life Direct of death-related costs – which include the expenses of a basic funeral, probate and memorials such as headstones – also reveals that almost half of bereaved families are opting for DIY estate administration in order to save money. Almost half (48%) are now choosing to do it themselves, compared to just 39% in 2013. Saving money was a key motivation cited by respondents. While the cost of the funeral has risen sharply at more than twice the rate of inflation to £3,590 – a rise of 3.9% since 2013 and a staggering 87% higher than in Sun Life’s first survey carried out eleven years ago – it nevertheless accounts for less than half (43%) of the total cost of dying. GUARDIAN

UK deficit balloons £48bn above 2010 forecast as Treasury is hit by £25bn hole in income tax receipts

The figures follow a warning by Office for Budget Responsibility (OBR) chairman Robert Chote who earlier this week warned that a mix of low wage growth and a large number of people employed in low paid jobs meant tax income receipts were going to be lower than expected despite a rise in employment. The OBR said the forecasts from 2010 were over-optimistic because it did not consider the effect of lower wages and salaries as well as a higher levels of tax-free personal allowance on income tax. National Insurance contributions were also £7.4billion below forecast. Increasing the tax-free allowance has been a key Coalition policy and earlier this month Prime Minister David Cameron outlined plans to increase the level below which no tax is payable to £12,500. The OBR figures comes a day after data from the Office for National Statistics showed workers' weekly earnings edged up by a meagre 0.7 per cent in the three months to August, still behind the rate of inflation, which dipped to a five-year-low of 1.2 per cent in September. A shortfall of £8.5billion from corporation tax - as City firms shifted balance sheet losses to offset liabilities - and a hole of £5.9billion from North Sea oil and gas receipts also contributed to the larger deficit sum. DAILY MAIL

The great miles per gallon con: How car firms cost you hundreds a year by using crafty tricks to bump up fuel economy figures

Last week, research by Emissions Analytics, a vehicle data company based in the UK, found that cars on average get 18 per cent fewer miles per gallon than is advertised. And that’s just the average. The really bad news is that if you have a small car with an engine size of less than one litre, then your fuel economy is a staggering 36 per cent lower than the manufacturers’ claims. Most small cars claim to travel 60mpg, but the true figure is just under 39mpg. As the engine sizes get bigger, the discrepancy lessens. With cars of engines of two to three litres, the difference is around 15 per cent, which is still significant. The biggest tricks the car firms use to improve the figures include: taping up doors, disconnecting alternator and driving DOWNHILL; keeping temperature at fuel-efficient - and decidedly un-British - 29C. DAILY MAIL

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