Defaults mean student fees hike likely to cost more than the system it replaced
New official forecasts suggest the write-off costs have reached 45% of the £10bn in student loans made each year. The 48.6% mark is the threshold at which experts calculate that the government will lose more money than it would have saved by keeping the old £3,000 tuition fee system. The coalition's decision to introduce higher fees of £9,000 shortly after it formed led to rioting on the streets and forced a dramatic decline in the Liberal Democrats' poll ratings, from which the party has never fully recovered. Lower pay for young adults, an over-supply of those with degrees and the worsening economic outlook have all contributed to the revised civil service forecasts which conclude that far fewer graduates will earn enough to pay back their loans over their working lives. Four months ago Willetts notified parliament that the rate had risen to 40% from 35%. In 2010 the estimate was 28%. GUARDIAN Big Six energy firms face full-scale probe as watchdog finds profits QUADRUPLED to more than £1billion in three yearsThe Big Six energy companies face a full-scale competition investigation amid widespread public distrust of the industry, soaring profits and evidence of possible ‘tacit’ coordination. Months of building distrust and debate around the energy market came to a head this morning as the regulator Ofgem announced the market will face a full investigation. The investigation would be the first full-scale competition probe into the energy market and would see the UK’s biggest suppliers come under an unprecedented level of scrutiny, with the threat of being broken up. Despite the rising profits, the damning report from the regulator said there was ‘no clear evidence of suppliers becoming more efficient in reducing their own costs’ and that further evidence would be required ‘to determine whether firms have had the opportunity to earn excess profits’. DAILY MAIL
Tory, LibDem and Labour MPs approve annual welfare cap in Commons vote
Welfare spending, excluding the state pension and Jobseekers allowance, will be capped next year at £119.5bn. The idea, put forward by Chancellor George Osborne in last week's Budget, would in future see limits set at the beginning of each Parliament. With Labour supporting the idea, the measure was approved in the House of Commons by 520 to 22 votes. However, eleven Labour backbenchers defied their leadership by voting against the plan. Diane Abbott, one of the Labour rebels, said the cap was a blunt mechanism that would not take into account changes in people's circumstances and economic factors such as rising rents. BBC NEWS
Cameron: You may have to pay for your own social care if you cash in your pension early
Prime Minister David Cameron has warned those who choose to cash in their pension early under Government reforms that they could end up paying more for their care later in life. It comes after George Osborne announced in the latest Budget that savers would be allowed to withdraw money from their pension pots as they wish when they retire. Osborne said his shake up of the pension annuity market was to end the stranglehold the insurance industry has on people’s pension savings. But anyone who has assets worth more than £118,000, including their own homes, will have to pay for their own social care. Cashing in your pension may push you above that limit. DAILY MAIL SSE pledges to hold gas and electricity prices until 2016
The company's price promise – which will last for at least 21 months – echoes Ed Miliband's call for a moratorium on energy price rises, which when made last September sparked outrage among industry and business leaders. The pledge also came just ahead of the announcement of a full-scale competition investigation of the energy industry by the new Competition and Markets Authority. The regulator Ofgem is calling in the CMA on Thursday, which would subject the big players to unprecedented scrutiny and could prompt calls for them to be broken up. GUARDIAN
Lloyds accused of short-changing PPI claimants
Lloyds Banking Group has been cutting the compensation it pays to payment protection insurance (PPI) claimants, saving itself more than £60m a BBC investigation has revealed. Lloyds cites a little-known regulatory provision called "alternative redress". This allows a bank, in specified circumstances, to assume that customers to whom it wrongly sold single-premium PPI policies would have bought a cheaper, regular premium PPI policy instead. BBC NEWS‘FTSE 100 is trading at 9000’: Santander fined £12.4m for mis-sold investments
The fine comes after the regulator conducted a year long mystery shopping exercise in 2012 across the UK’s banking sector. The watchdog said it had unearthed shortcomings in the Spanish-owned bank’s advice on Isas, pensions and investment plans. In a 53-page report a series of failures are highlighted by the regulator. The most eye-catching and disturbing is that financial advisers working at Santander branches incorrectly told customers the FTSE 100 was trading between 8000 and 9000 at the height of the financial crisis in 2008. At the time the UK’s main stock market index was trading at just over 5000. Other misleading advice statements included customers being told their investments would probably double, while others were told their investment returns were guaranteed. Overall the mystery shop found 22pc of advisers provided misleading product information, while 28pc gave misleading answers on costs. TELEGRAPH
Thousands of schools shut by NUT strike
Thousands of schools in England and Wales were closed on Wednesday, as teachers joined picket lines in action over pay, pensions and conditions. The NUT has been embroiled in its current dispute with the government over pay, conditions and pensions for more than two years, and staged a series of regional strikes, together with the NASUWT teaching union, last year. BBC NEWS
Energy companies 'charge loyal customers £90 more than those who have switched to them'
Households that have not changed supplier since privatisation are paying more for their energy than they need to because the biggest companies add a surcharge to their tariffs, the think tank IPPR claimed. The IPPR’s analysis also found electricity bills in 2013 for customers who had not switched were £27 higher than for those who had. It said the different amounts paid for gas by those who had and had not swiched had trebled since 2010, rising on average from £26 to £76. IPPR said: ‘Ofgem has shown itself to be incapable of taking the action that is necessary to get the energy market working in the interests of consumers. In the four years since Ofgem launched a major review into whether competition is effective in energy, the surcharge on gas prices has increased substantially.” DAILY MAIL
Britain is facing a housing disaster as it is one million homes short, warns new report
Britain is now one million homes short of meeting its housing needs – a decade on from the flagship Barker Review of Housing Supply. The 2004 report by Kate Barker, commissioned by the then Labour government, found that 210,000 homes needed to be built each year to prevent a housing crisis. The economist also set a more ambitious target of ‘improving the housing market’ and making property more affordable by building 260,000 homes a year. But a follow-up report shows that an average of just 115,000 homes a year have been built since then – meaning the country is 953,000 homes short of one target and 1.45million short of the other. DAILY MAIL
Vince Cable warns 30 biggest firms over executive payouts
The business secretary Vince Cable’s intervention comes after a string of banks revealed lavish rewards for their top staff despite weak results. Barclays announced it would pay 481 employees £1m or more after a year when profits fell by a third and shareholders' dividends were flat; top managers at Lloyds will share £27m in bonuses even though the bank – 33% owned by the taxpayer – remains engulfed in mis-selling scandals. British bosses now earn 133 times more than the average pay of their workforce, according to the High Pay Centre, and top pay has quadrupled in the last decade. Cable is concerned that some companies are ignoring the spirit of sweeping reforms introduced in 2013 to promote transparency in the boardroom. Shareholders now have a binding vote on remuneration policy once every three years and companies must take into account the pay and conditions of the average employee when setting executive pay. Cable’s calls for further reform are set to cause alarm among some shareholder groups while annual reports revealing this year's pay are still at the printing presses. GUARDIAN
Winston Churchill said of America:
