Key political fibs, and some tips on how to refute them

Money has been devalued. I do not refer to inflation here. Money has been devalued because people don't value the things they can get too easily. 

The people who control our economy - the top politicians and businessmen - have served themselves extremely generously over the last few decades, and now for them money is commonplace. Because it is of little value they carelessly give it to some (themselves and their associates) and thoughtlessly take it away from others (the rest of us Britons). They do this with no more concern than casting a shadow.

People with vast amounts of money think people with merely lots of money are poor. In a campaign speech Mitt Romney, an American presidential candidate, said he thought the average American earned a quarter of a million dollars. Presumably he regards $250,000 a year as a very modest amount. Thus he and his ilk blindfold themselves to the consequences of their actions with the assumption that the poor only have lots of money, rather than pots of it, allowing their consciences to let them rip off an extra few hundred pounds with an increase in ticket prices and utility bills. And rip off another extra few hundred pounds with freezes in pay and cuts in benefits and pensions. Money isn’t important, they tell themselves, therefore it isn’t important if I help myself to some more of it.

http://g-mond.parisschoolofeconomics.eu/topincomes/#Database:

But just as people don’t value the things they have in plenty, they do value what they have little of. For 90% of Britons, whose income has stagnated in real terms for decades, money does have value. And when it goes, it hurts.

Britain is going through some painful changes. One of which is a public intolerance of lying and cheating. Vilification is everywhere: bankers (for a compendium of dodgy activities that have come to be known generically as ‘banking’); media moguls (phone hacking, bribing officials, etc.); suppliers ripping off the government (MOD paying £22 for 65p lightbulb, etc.); insurers (inflating repair costs to hike premiums, etc.); MPs (fiddling expenses; lying about anything including swearing at cops; providing commercial favours; complicity in kidnapping and rendition, etc.). Pity the banker/MP/mogul who now find themselves in deep doo-doo for doing precisely the same thing they were openly doing when they were fêted as ‘leading citizens’. Pity? Perhaps not.

Bankers have been manipulating LIBOR for years, an open secret that was shouted across trading floors with bankers offering one another a choice of rates like sweets from a tin of Quality Street. Strawberry Delight or Orange Crunch, up a little or down a lot? Fabulous profits tumbled in from the Payment Protection Insurance scam, insider trading, grotesque charges on pensions and investments. All these scams were hardly a secret to an insider or an insider’s friends or his friends’ friends, their spouses, paramours and personal trainers. The perpetrators of these scams were not just quietly indulged, but were proudly trumpeted as the jewels in the British industrial crown. To keep them, we are told, we must pay them generously and regulate them pusillanimously.

Unimpeded and celebrated dodgy behaviour became an open secret that spread like a flu virus infecting the upper echelons of Britain. Ripping off clients, customers and constituents was in order to harvest as much money as the bankers. Confusing rewards with merit, they proved their ‘excellence’ by the amount of money they could grab. And then justified the amount of money they could grab by their ‘excellence’. Even our sainted family doctors got in on the act with a 58% pay increase over 4 years for doing less work. British culture itself went through a sarcastic period, Sarc-Art, when unmade beds, stuffed sheep, lights going on and off, and crumpled pieces of paper were selling for ludicrous prices to people with too much money to value it. As soon as our Brit-Artists realised that their sarcasm was profitable, perhaps they too believed in their own excellence?

Britain is going through some painful changes. But some changes go in a circle, and return you to where you started. A painful diet can lose you a stone or two in weight, but in all probability the weight will gradually return. 

We see British politicians and industrialists following the example of Fabius Maximus, the ancient Roman general known as “the delayer”. Fabius Maximus saved Rome from the Carthaginian invasion of Hannibal by avoiding battle and slowing Hannibal down until he ran out of va-va-voom and left Italy. This Fabian strategy – now in the form of various enquiries and name changes – is the hope of the modern day rippers-off to slow things down until the public anger passes, so they can get back to business as usual.

Sadly we ordinary Britons are probably doomed to Hannibal’s fate. When the economic crisis eventually lifts the public anger will lessen, and the Delayers will have won. But at least we can, like Hannibal, aspire to be heroic losers. Do not lose your va-va-voom. Have your response to the lies ready:

• When they tell you the finance sector is the premier employer, it isn't true. Employment in finance has stagnated for years well below other sectors: click here for counter-argument

• When they tell you the finance sector is a major contributor to tax, actually their corporation tax is just 2% of the total tax take: click here for counter-argument

• When they tell you it would be a disaster if the financiers left Britain, the Independent Banking Commission said only less than 6% of banking tax revenues (including payroll taxes) can be easily moved out: click here for counter-argument

• When they tell you cutting taxes on the rich will make us all richer, decades of tax cuts under Tory and Labour has left 90% of us with zero real growth in pay over the last 2 decades: click here for counter-argument

• When they tell you cutting tax will make the economy grow, figures show there is no correlation between tax cuts and growth: click here for counter-argument

• When they tell you energy prices follow wholesale prices, show them graphs from Consumer Focus demonstrating this is not true: click here for counter-argument

• When they tell you rail ticket prices must go up to pay for investment, rail regulator figures show that while prices have gone up investment has plummetted: click here for counter-argument

• When they tell you consumer law protects us from rip-offs, show them extracts which specify only the 'average' consumer is protected (i.e. the less than average 50% are not): click here for counter-argument

• When they tell you pensions are running out of control, show them figures showing the share of GDP going in pay and pensions has been falling since the 1970s: click here for counter-argument

• When they tell you saving with pension companies will give you a prosperous retirement, point out that UK pensioners lose upto half their pension pot in charges: click here for counter-argument

• When they tell you the change linking pensions to CPI instead of RPI won't make much difference, just show them the graph with the grim mathematical truth: click here for counter-argument

• When they tell you there is an unfair differential between public and private sector pay, tell them about the rigged figures used to prove this: click here for counter-argument

• When they tell you ensuring people only claim what they are due in benefits, not a penny more not a penny less would save money show them that benefits are actually vastly under-claimed: click here for counter-argument

This should be important to activists in all political parties. Not even the Tories can afford to ignore what is happening to 90% of the electorate. The fact is, most voters of all political tendencies are being ripped off. The strongest tactic of the delayers is to make false statements - such as "Income tax cuts for the wealthy make us all richer". The best counter-tactic is to know your facts, and knock this kind of fib on the head without delay.

In all probability the delayers will outlast us. The small number who want to delay the reforms needed to stop the scams will hope to be rewarded with millions. The vast number of us who want the scams to stop will be rewarded with nothing more than justice. Justice: another under valued commodity.

Read More

Consumers 'lose £11bn a year' in financial scams and rip-offs

KJ and Fee discuss the report by consumer expert and boss of Cooperatives UK...

Read More

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

The poorest in society pay on average £1,289 a year more than those on average incomes for financial goods and services
The investigation, commissioned by the Labour party, estimated that consumers 'lose £11bn a year' in financial scams and rip-offs.  The most common complaints related to poor quality of service and defective goods. But the three big rip-off areas are banking and utilities, as well as vehicle repairs.  GUARDIAN
("We are ashamed and humbled to discover our members are as thoroughly wicked as that well known bunch of shafters," said the Association of Dodgy Garage Owners)


'I was refused a payout because I was dying too slowly'
Scottish Provident withheld  a total of £240,000 from Mr Onyett (who had terminal motor neurone disease) and his family. The small print in the two policies meant it only paid out to someone with less than 12 months to live. The relevant clauses were buried in two documents: one 25 pages long and the other 24 pages. DAILY MAIL
("Honestly, when they pointed it out in the small print, it was a complete revelation to us," said a roomful of Scottish Provident salesmen)

Pension firms warned to end hidden fees or face sack from industry's regulator

The fees typically wipe more than £100k from the value of a middle-class worker’s pension. Trust in pensions is at an all-time low: only 2.9m private sector workers now save into a workplace pension, the lowest level since 1954. The Pensions Regulator added they ideally prefer the industry to regulate itself. TELEGRAPH

Tax evasion cases investigated by HM Revenue & Customs drops by 25%

This seems to go against promises of clamping down harder on tax evasion. But a much tougher approach is being taken by HMRC... if you are a plumber. Melvyn Careswell, a plumber, was jailed for 12 months for tax evasion after failing to register his earnings for five years. A £50,000 tax evasion case used to be subject to civil prosecution, but now it is criminal. GUARDIAN

(Tax dodging plumbers everywhere are shaking in their boots. The economy is saved!)

Women drivers will soon pay for boy racers, as insurers are banned from discriminating between the sexes
From December insurers are banned from using your sex when deciding how much you should get for a pension or pay for insurance. It also means that men, who tend to die younger, will no longer get a bigger monthly pension payout than women. Other products affected include life cover and income insurance. DAILY MAIL

British Bankers Association agrees to be stripped of $350 trillion Libor regulation role after rigging scandal
Britain will propose that Libor, the interest rate at the centre of a rigging scandal, is anchored to real transactions rather than by "estimates" by the banks overseen by the BBA. The Libor rate prices contracts worth $350 trillion globally, from home loans to credit cards. But traders warned any change should be through "evolution, not revolution." TELEGRAPH
(Last time we looked, evolution's most successful species was the cockroach. So no surprises there.)

Vince Cable reveals plan for £1bn bank to help small businesses
The new funding for manufacturers comes after pleas to high-street lenders fail. But the IPPR think-tank said £40bn was required to boost lending significantly to firms. The new bank's cash will not be channelled directly to companies nor through the big high street banks, but through "challenger" banks such as the Co-operative, Handelsbanken and Aldermore. It will be run at arm's length from the Treasury. INDEPENDENT
(...and at barge-pole's length from the high street banks.)

Hidden catches and 20,000 words of jargon: The savings deals that reduce your rates to virtually zero
Banks such as Halifax, Lloyds and Santander bombard customers with reams of onerous terms and conditions for simple accounts. Halifax savers are given a 52-page booklet 20,000 words long. Those who don’t read these details thoroughly find the top rates on some accounts later reduced to almost zero. DAILY MAIL

New watchdog promises fresh assault on rip-off  Britain investor fees
If you invested £10k in a fund with no charges, growing by 6%/year for 20 years, you would get a return of £32k – just over £22k of growth. But if that charge is 1.67% - the industry average – your return is reduced to £23k, so around £9k disappears in charges. British charges are far higher than those in other major markets, and 79% higher than in the US. DAILY MAIL

Global banking system still just as vulnerable despite blizzard of new regulations, says the IMF
The world's banks are just as big and intertwined and just as reliant on short-term wholesale funding (rather than more solid savers' deposits) as they were prior to the financial crash. The IMF also wants regulators to consider banning banks outright from certain risky activities. GUARDIAN
(Risky activities include allowing bankers to turn up, sit down, switch on their computers and begin a day's work. That's when the trouble really starts.)

Read More

Tory Chief Whip Andrew Mitchell calls coppers "plebs"

He'd better watch his language...

Read More

Rail fare increases - gouging profits or a stealth tax?

Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness.

Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Dickens' wisdom, from the mouth of his literary creation Mr.Micawber, would suggest that British train companies have had a surfeit of happiness in the last decade. 


Companies seldom admit they put up prices to fatten their executives' pay or to boost dividends to their shareholders. They'd far rather claim they are forced to take more money from us for our own good. Energy companies justify price hikes asserting, dubiously, that they pay for 'greening' their output. Train companies justify rocketing fares with the claim they are investing in track and trains. A cleaner country and better commuting. Who wouldn't pay for that, they assert.

The reality, exposed in their own rail industry reports, is that in the last decade the train operating companies have been growing their income while reducing their expenditure on improvements. Yet rail bosses still plead the need to increase fares, apparently demonstrating their Micawberish tendencies in their puffing pursuit of personal happiness. 

If that is not the case, where is the money going?

According to the Office of Rail Regulation (ORR) everything about the railways has been steaming upwards for a decade except for one thing that has been falling like a lump of coal: investment by the private sector train companies back into the industry. 

We are told repeatedly, by rail company directors and government transport ministers, that fares need to go up to pay for renewing our railways. However, statistics from the ORR show private investment, excluding the track owning Network Rail, halved between 2006 and 2010. And the rise in 2011 has only brought it back to 70% of 2006 spending. 

In contrast to this precipitous fall in investment, ORR figures show that Ticket Prices have soared by upto 50% since 2004

(If you thought that the big fall in 'Advance' tickets in 2009 was generous, be aware that according to a Department of Transport report in 2012 these constitute just 4% of all tickets).

Again, in stark contrast to the fall in investment, total ticket revenues have increased 97% since 2002, and gone up over 40% since 2006:

This increase in revenue has not been achieved by running more trains, as ORR figures show Train Kilometres (i.e. the total number of kilometres travelled by our trains) has crept up by a mere 15%. (To clarify: if twice as many trains ran on the same line, then the number of train kilometres would double).

Even though train kilometres have only edged up 15%, Passenger Kilometres, i.e. total number of kilometres travelled by us Britons and our foreign visitors, has jumped by 40% since 2004. A 40% increase in passenger kilometres and only a 15% increase in train kilometres, all in the same period, has presumably been achieved by packing us in more tightly.

So where has all this extra loot gone? Perhaps the additional money extracted from the travelling public is not all going into the pockets of the executives of the train companies. Perhaps some is going to Network Rail? But even Network Rail has no plans to significantly increase their spending. In 2009, when fares were soaring, Network Rail's expenditure plans showed a falling trend. It makes one wonder, at a time when all investment plans were reducing, why passenger fares continue to rise so fast?

Their updated plans of 2012 showed a broadly flat trend - and certainly no significant increase.

So if it's not going to train nor track executives, is all that extra money going simply so the government can save money by cutting its funding for rail investment? 

Government cuts in spending have enabled cuts to the top rate and corporation taxes, as done in the 2012 budget? Stealthily recouping the lost revenue from train travellers?

Income tax takes more from those who have more. Rail fare increases are like a flat tax, the same for everybody buying a ticket. An extra £1 on your ticket price a day is an extra 1% tax on shop assistants earning £100 a day, and an extra 0.2% on a manager earning £500 a day. It's all going into the pot to pay for the 5% tax cut in the 2012 budget for those earning over £150,000.

Do I hear you ask why the taxpayer should subsidise commuters? Well, the government forked out billions to bail out the banks. In spite of the wild exaggerations of banker-groupies the banks' contribution to the UK economy is far smaller than any one of manufacturing, business services, education and health.

Gouging profits for train operators or a stealth tax for the government? Either way stonking fare hikes are just another rip-off on us ripped-off Britons.

Read More

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

Lloyds Bank's secret "bonus list" rewards hard sell sales culture among 'advisers'
Leaked document shows how many points each member of Lloyds staff 'scores' if they sell certain products. If they hit targets they win bonuses. But this can result in customers not getting the 'best advice.' DAILY MAIL

("We totally deny these allegations" said Lloyds in a hurriedly called press conference that nobody really asked for, during which they tried to sell absolutely everyone some pet insurance)

UBS trader 'gambled away' £1.4bn

A City trader "gambled away" £1.4bn ($2.3bn) of his firm's money and caused "chaos and disaster", a jury has heard. The prosecutor said that at one point "Mr Kweku Adoboli was betting the entire bank on the toss of a coin. He was a greedy banker out of control and out for himself." The fraud began in 2008, after the start of the banking crisis. BBC NEWS
("But had the fraud taken place before 2008, he'd be Chief Executive by now. Makes you think..." said defending counsel)

Payday lender Wonga trebles earnings as recession worsens

Short-term loan provider benefits from surge in applications. The number of loans it provided in 2011 quadrupled to 2.5m, and its income rose 225%. The CEO denied they were legalised loan sharks. He explained that most of the loans are small, and paid off soon after. GUARDIAN
("...although we keep receiving a £50bn loan application from a Mr G Osborne. As a responsible lender, we always turn him down," he added.)

Homeless families in B&B accommodation up by 44%
20 councils warned their insufficient budget meant they had to house families in B&Bs for an 'unacceptably long time'. But the housing minster insisted councils had sufficient funding to provide a perfectly adequate safety net. GUARDIAN
(When asked what he meant by a safety net, he replied "You know..., one of those things made of string.")

Private health firms told to get set for £20bn NHS bonanza
A report commissioned by private sector providers says there is 'significant opportunity for the private sector in primary and secondary care' by taking over GP surgeries and setting up new community health clinics. Andy Burnham, the shadow health secretary, said "Worse still, in Jeremy Hunt we now have a health secretary who bent over backwards in his last job to promote powerful private interests." GUARDIAN

(“Creating commissioning contracts clearly confuses that Hunt,” criticised one concerned consultant)

NYSE pays first-ever fine for compliance failures that gave some favoured customers trading information before the general public

The New York Stock Exchange's "technical problem" began in 2008. "Improper early access to market data, even measured in milliseconds, can in today's markets be a real and substantial advantage that disproportionately disadvantages retail and long-term investors," said the regulator. SECURITIES AND EXCHANGE COMMISSION (SEC)

Iain Duncan Smith's £2bn "benefit tourism" estimate cut by 92%

Last year Work and Pensions secretary Duncan Smith condemned the EU proposal that allowed anyone in the EU to claim benefits in the UK. He had said it could cost the UK more than £2bn a year. Now he admits it is only £155m. Officials said the £2bn figure was the "best estimate at the time". BBC NEWS
(When asked whether all his other predictions had a 92% margin of error, the minister replied, “No, just one: that we will win the next election with an overwhelming majority.”)

Mitt Romney has said that people taking home $250,000 (£154,000) are "middle income". Actual US average income is only $39,959

The misunderstanding explains why Mitt thinks all those "middle income" people he meets dining in ritzy restaurants and driving new cadillacs aren't suffering in the current bust. TELEGRAPH


The professional body for tax accountants says the government's Advisory Panel on tax dodging should have no representatives from HMRC 
"We think it is necessary for it to be genuinely independent, drawing on those with current practical tax experience and with no HMRC representatives" said the CIOT president. Chartered Institute of Taxation
(In other news, football matches will now only have one team on the pitch at a time, packs of cards will contain 52 aces, and juries will consist solely of the friends and family of the accused)

Read More

Wonga loans quadruple as recession deepens

Fee takes a Wonga employee to task over its lending criteria

Read More

Why nationalising the Royal Bank of Scotland (RBS) will save the soul of banking

In the midst of the usual summer silly season, rumours went round that the UK government was thinking of fully nationalising the Royal Bank of Scotland. 

What a good idea we say. Because far more than further appeals to bankers' decency and threats of regulation, this actually could have saved the soul of the financial services industry.

When it rescued RBS in 2008-09 the government bought 84% of a pig-in-a-poke. With no time to look in the bag, £45 billion of taxpayer money was hurriedly handed over. Ministerial hopes to unload this embarrassing porker, that kept on snouting down bonuses in spite of continuing dismal performance, may lead to the government breaking up and selling the beast as chump chops. Already September 2012 saw RBS putting its Direct Line subsidiary on the block. If this continues, the taxpayer will be left with just the pig's squeal - which would suit the bankers just fine.

Royal Bank of Scotland share price, London Stock Exchange

Bankers and their political helpers assert that if we put a stop to excessive pay and lax regulation they would leave. And thus, they assert, Britain would have no banks. They want us to believe that the alternative to dodgy banks is no banks. A nationalised RBS could prove that the alternative to dodgy banks is actually not dodgy banks, run by people paid sensibly with their customers' interests at heart.

Financial Services executives have always maintained an exceedingly effective smokescreen to avoid sanctions for their scams using their counter and call-centre staff as chaff. They avoid regulatory action with the excuse “a small minority have let us down.” They avoid controls on pay and bonuses asserting “most of our staff receive just a few hundred pounds”.

It is true. Most bankers are legal, decent, and honest. An excellent and effective piece of wisdom I heard somewhere: If you add 1 pint of sewage to 99 pints of milk you end up with 100 pints of sewage. It is this 1 pint that controls and corrupts the soul of banking.

When he asserted that “a small minority have let us down”, Bob Diamond wrote the truth. At any one time only a small minority are caught in the spotlight of disgrace. Mis-selling of endowment mortgages was ancient history by the time Payment Protection Insurance (PPI) hit the fan, which had faded from the headlines by the time the LIBOR fraud was brought front and centre, which too will have exited stage left pursued by nothing much by the time the Interest Rate Swaps deceit gets its brief moments in the limelight.

The summer of 2012 saw another clutch of banking insights from senior politicians and regulators.

George Osborne, the chancellor, said in Parliament, just before heading off on his holiday:

Through 2005, 2006, and early 2007, we see evidence of systematic greed at the expense of financial integrity and stability. They knew what they were doing wrong.

“Keep a secret” one trader tells another in February 2007.

“If you breathe a word of this I’m not telling you anything else”.

Yet no one at Barclays prevents them. And no one in the tripartite regulatory system knows anything about it.

Lord Turner, chairman of the Financial Services Authority, said in a speech at Bloombergs:

Huge bonuses may have amazed and bewildered the ordinary citizen, but the experts were on hand to explain that in some mysterious way ever more intense and complex financial activity was increasing the total size of the economic cake, with the prosperity of all enhanced, even if less richly than that of some bankers.

The reality being that all the growth went to the favoured few. For 90% of Britons, their prosperity has stagnated for decades.

http://g-mond.parisschoolofeconomics.eu/topincomes/#Database:

Turner went on to say, quoting the economist Raghuram Rajan:

many of the key participants [dodgy bankers] have no direct contact with the end customers [that would be us] whose lives they are affecting, and only transient contractual relationships with their counterparties [other dodgy or incompetent bankers managing our savings].  And it is simply easier to make huge amounts of money out of a multi-step chain which connects ill-informed investors in one country to ill-informed sub-prime borrowers in another, and still go home believing that you are a fine upstanding member of society, than knowingly to sell a bad product or service to a customer with whom you have more direct contact.

In short Turner observes that much of ‘financial innovation’ simply made it easier to rip off customers without meeting them. It is much easier to cheat someone if you don’t have to look them in the eye and you don’t have to see the consequences, the financial hardship and the repossessions, of your deceits and dissembling.

The FSA released a consultation stating that the corruption has eaten its way down to junior staff. Martin Wheately, Managing Director of the FSA and CEO designate of the Financial Conduct Authority (FCA, which will take over from the FSA as the new financial services regulator), said in his speech to senior bankers at a Thomson Reuters Newsmaker event

“while public attention has been on the huge rewards on offer to the few, the effect of more modest rewards on the many needs to be dealt with….Incentive schemes on PPI were rotten to the core”

We looked at 22 firms of all sizes, including high street banks, building societies, insurance companies and investment firms.  And what we found is not pretty.  Most of the incentive schemes we looked at were likely to drive people to mis-sell to meet targets and receive a bonus

.. another firm allowed sales staff to earn a bonus of 100% of their basic salary for the sale of loans and PPI, but the bonus was only payable to those who had sold PPI to at least half their customers.”

Wheately boasted,

We, as the regulator, intend to change this culture of viewing consumers simply as sales targets and I am going to be personally involved in getting this right.   This will be part of the ongoing improvements we make to regulation as we seek to make markets work well and give people a fair deal.

A document leaked by a member of Lloyds Bank counter staff exposes the incentives and pressures on junior bank staff.

Should we feel more secure knowing that Wheatley of the FCA is on the case? Back in 2009 the then FSA chief executive, Hector Sants, said at an earlier Thomson Reuters Newsmaker Event

There is a view that people are not frightened of the FSA. I can assure you that this is a view I am determined to correct. People should be very frightened of the FSA.

The bankers chuckled up their bespoke sleeves, with scant sign of nerves. And in March 2012 Sants announced his decision to quit, much to the indifference of the un-scared bankers.

In the end, regulators won’t be able to beat determined banksters. The excellent Andy Haldane, who would make a most entertaining and perhaps effective Governor of the Bank of England, observed in his summer speech at Jackson Hole that there have never been more regulators, rising from 1 regulator for every 11,000 financial services employees in 1980 to 1 for every 300 by 2011:

"In the UK up until the late 1970s, bank supervision was performed by the Bank of England on an informal basis, with a team of around 30 employees. Even when the Bank was given statutory responsibility in 1979, fewer than 80 people were engaged in the supervision of financial firms.

In the period since, the number of UK financial supervisors has increased dramatically, rising almost forty-fold (Chart 1). In response to the current crisis, regulatory numbers are set to rise further. Over the same period, the number of people employed in the UK financial services sector has risen fractionally. In 1980, there was one UK regulator for roughly every 11,000 people employed in the UK financial sector. By 2011, there was one regulator for every 300 people employed in finance."

The financial services industry is unique in the wantonness of its excesses. Other professions are paid very well, but on the whole their members have to prove their worth in formidable tests. Lawyers have to show they are smarter than other lawyers. Accountants have to show they are smarter than taxmen. Doctors and engineers have to prove they can outwit nature – keeping patients healthy, keeping a building standing, a ship floating, a plane flying. Sportsmen compete in the most public way possible, and entertainers wrestle with the unforgivingly fickle public voting with their television remote controls.

But financiers simply have to steal the blouses off grannies’ backs.

Surely it is no surprise that excessive pay attracts people who do whatever is necessary to be paid excessively?

So we say, nationalise the Royal Bank of Scotland. Run it like a “Peoples’ Bank”, paying sensible salaries and making sensible profits. Cap remuneration at £1m (the new Barclays CEO is on £8.6m including bonuses etc) - if that isn't incentive enough then find people with nobler motivation. That would frighten bankers far more than a ruthless regulator’s or a malleable minister’s empty threats.

Nationalising RBS will also provide a refuge for those who have been scammed by excessive overdraft charges, PPI, and all the other stuff. And also for banking staff who are fed up of scamming their fellow citizens. Currently our choice is to jump from one frying pan to be sizzled in another frying pan.

Bankers fear nothing more than a bank being run successfully by people on ordinary salaries who do not resort to excessive charges and other scams. The silly season saw talk of nationalising the Royal Bank of Scotland. It’s not such a silly idea. 

Nationalise RBS. Bankers, with no fear of politicians or regulators, would fear nothing more than this. Britons would be far less ripped-off.

Read More

The 'fiendish' loopholes that keep tax dodgers ahead of HMRC

Chris, KJ and Fee discuss HMRC's attempt to crack down on tax avoidance

Read More

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

Health and safety inspections cut in regulation curb

Plans to exempt thousands of businesses from health and safety inspections are to be announced by ministers. "We have identified the red tape and now we are going to cut it," said Business Minister Michael Fallon. BBC NEWS
(Mr Fallon was speaking whilst standing under a poorly secured 500kg chandelier. Held up only by a piece of red coloured tape. Which someone promptly cut.)

Planning rules on building extensions to be relaxed 'to boost economy'

The government wants to get planning officers "off people's backs." But the Local Government Association says such red tape is a "myth." It released figures showing a backlog of 400,000 prospective homes which have planning permission but have not yet been built. BBC NEWS

HMRC's special tax unit nets extra £500m from Britain's richest

The High Net Worth Unit has investigated 5,000 of the wealthiest taxpayers, each with assets exceeding £20m, and exceeded its collection targets. The unit achieved this with only 380 staff. GUARDIAN
("It's so profitable we're going to outsource this unit to the private sector," said the Minister for Outsourcing Everything Profitable to the Private Sector)

Blair snaps up a nifty million bucks brokering Glencore's new 'take it or leave it' £22.5bn bid for Xstrata

After an 11th hour intervention from Tony Blair that earned him £625,000, the long-running saga of the Glencore-Xstrata mining merger looked to be entering its final chapter. DAILY MAIL

Thousands set to lose out as drugs giant Glaxo slashes pension benefits for its UK workforce

The drugs giant becomes the latest in a long line of blue-chip businesses to take a knife to company pensions.  Unions asked the government what their policy was to cope with this "race to the bottom" for pension provisions. DAILY MAIL
("Take two aspirin? That's as far as we've got," said our government insider)

Workers borrow more than £300 a month

The amount employees are borrowing to get through the month had risen sharply from £127 to £327 pounds since March. TELEGRAPH

US tax authorities award $104m (£65m) to UBS employee for exposing bank's massive tax dodge

Bradley Birkenfeld rewarded for being the whistleblower in a major tax evasion case against UBS, the Swiss bank. Yet Birkenfeld  had been jailed for conspiring to defraud the US after admitting to assisting a wealthy American real estate mogul conceal $200m (£121m) from the IRS in offshore accounts. TELEGRAPH

(So... a thieving banker is released from jail and given $104m for finally telling the truth. THERE IS NO GOD.)

Business secretary Vince Cable dismisses right wing claims that further business deregulation is the key to growth
Cable rejects looser "fire at will" employment laws. He said consultation showed minimal business support for the idea, adding that greater job insecurity was undesirable at a time of low consumer confidence. But he recommends the removal of a chunk of health and safety legislation. GUARDIAN

Flagship aircraft carrier HMS Ark Royal will be sold as scrap for £3m

The ship was decommissioned 5 years early to help tackle a multi-billion pound defence deficit. Attempts to sell it to developers as a helipad, casino, or other, have failed. BBC NEWS

Divorce settlements should be worked out according to a mathematical formula 

Formula would divide up a couple’s assets depending on income and how long they have been married, a major review has suggested. Using the formula can provide clarity and satisfy both partners, before it all ends up in court. "But it doesn't mean, come the divorce, if you've done nothing you'll get nothing". TELEGRAPH

("Phew!" said the junior partner in our coalition government.)

Ofqual 'ordered late changes to GCSE English grade boundaries'

Letters leaked to the Times Educational Supplement show exams regulator Ofqual ordered exam board Edexcel to make changes beyond what "might normally be required". As a consequence, the same mark that got a student a C in January got a student a D this summer. BBC NEWS

(Moving the goal posts AFTER thousands of balls have been kicked into the back of the net takes some doing.)

Read More

SMEs, make sure you don't get rolled-over by your energy supplier

Guest post by James Newhouse who works alongside PowerExperts.co.uk

When it comes to business gas or business electricity suppliers, there is a serious pitfall that both SME and larger organisations can become victim to – the ‘rollover’. Many do not realise when their business energy contract is up for renewal and do not realise that if they do not act to renew their contract or change supplier at the end of their contract, it can be ‘rolled over’ automatically at less than competitive rates. In fact, in a lot of cases, a rolled over contract can result in a 40% price hike or more according to this parliamentary report:

Average Prices:               Current Price                Rollover Price                 Switching Price

Business Electricity       9.3p/kWh                           14.25p /kWh                         10.15p/kWh

Business Gas                  2.5p/kWh                            4.5p /kWh                              2.9p/kWh

The average SME spends £2580.67 per month on their business energy electricity bills if the average unit price for an SME is 9.3p/kWh with an average standing charge of 22.35p per day – the standing charge accounts for £670.50 of this. If this contract is rolled over onto "out of contract" rates, there could be a monthly spend of £2926.87 on electricity alone, not including the increased daily standing charge. That’s already a 13.4% increase for electricity without even considering the gas hike. 

And even though you rolled into this new contract without intending to, you will be locked in until the next renewal / expiry date (12 months or more) unless you want to pay a hefty mid-contract termination fee. Businesses are therefore inadvertently committed to the increased rate until the end of new contract.

In order to avoid your contract automatically rolling on, you need to renegotiate your contract or transfer to a new supplier before it is too late. The biggest complication for any business is knowing the restrictions your current contract can have on switching. It is essential you are aware of all of the terms and conditions of your current energy provider.

Ofgem have released advice for firms on how to understand business energy contracts, warning that it is vital to understand them to keep in control of business energy spending. Ofgem’s business energy contract guidelines include hints and tips such on how to avoid being ‘rolled over’ including:

• Make sure you have a duplicate of your contract – For micro businesses, energy suppliers must directly send you a copy of your contract terms and conditions. For larger organisations, your supplier must ensure that you are able to see a copy of the terms and conditions, but request to have a copy made and sent to you in addition to this.
• Know when your contract ends – Make a note of the date at which your contract begins and ends as well as the valid notice period in which you are able to switch. Put these dates in your business calendar and set up online reminders to ensure you do not miss the opportunity to switch at the end of your term.
• Know the difference between renewal and notice periods – You should be aware that the terms in a residential and business energy contract are different. Residential contracts can be fixed or variable whilst business contracts are always fixed term. Make sure you are fully aware of the exact window in which you can notify your supplier about switching your deal. You must send a written notice to your supplier to terminate the contract if you are planning on switching to a cheaper supplier. Click herefor example letters.
• Understand what will happen if you don’t switch or sign a new contract – If you are a micro business and your contract rolls over, the new contract can be up to one year and the rates of your terms can increase without notice. If you are a larger company then the supplier can commit you to a new contract that is longer than one year! Make sure you understand in advance what your company will be subject to in the case of a rollover.

If you are not ‘rolled over’ by your energy supplier at the end of your contract, you could still be charged at a higher rate for the energy you use thereafter, due to contractual obligations. So beware!

This information was provided by James Newhouse who works alongside PowerExperts.co.uk , where you can get free advice and information about getting cheaper prices for business utilities and supplies for commercial organisations in the UK. 

Read More

HMS Ark Royal sold as scrap for £3m

KJ and Fee consider an alternative future for HMS Ark Royal

Read More

Liebrary: The only way to save our children from paying the national debt is to cut services?

August 2012 threw up another howling hypocrisy in the “we are all in it together” mantra:

• The Bank of England admitted that the wealth enhancing benefits of its Quantitative Easing (QE) money printing exercise had gone to the wealthiest – giving them an estimated £600 billion boost to their wealth.

• Assorted Tory politicians jumped over poor bedraggled Nick Clegg for suggesting a wealth tax.

To put this in perspective, HM Treasury figuresshow the UK National Debt passed £1,000 billion this year. Just the £600 billion increase to the wealthy resulting directly from QE would pay off well over half of the national debt.

However the government prefers to pump QE money into inflating the wealth of the wealthy by £600billion, and pay off the debt by cutting jobs, salaries, services, and pensions for everyone else.

The amiable Tory MP Bernard Jenkin dismissed the notion of a wealth tax as the "politics of envy", advising  not to 'strangle the goose that lays the golden egg'.  Jenkin overlooks that while this particular goose ate all the corn, it hasn't produced anything from its nether regions that brought benefit to 90% of ripped-off Britons whose incomes have stagnated for decades.

http://g-mond.parisschoolofeconomics.eu/topincomes/#Database:

And in spite of all the exertions of the corn-fed honkers, half of us have absolutely no assets according to Bank of England figures:





RELATED ARTICLES

Distribution of household financial assets - half of us have zero

Bailed-out banks hide tax-dodging $21tn offshore cash hoard

Do income tax cuts for the rich make us all richer? See the dismal evidence to the contrary

SOMETHING COMPLETELY DIFFERENT

It was bank borrowing that caused the debt crisis, not consumer borrowing

MPs make a try for a discrete £20k+ pay-rise in the face of the public sector pay-freeze

Read More