Graphs at a glance: Data shows how successive governments, both left and right, have enriched a tiny minority at the expense of almost everyone.

The 2014 European election result was shaped by the anger of ordinary people who have been misused to pay the price of the banking crisis. In the UK the Tories threw them out of the basket, the LibDems assisted with a sheepish smile, and Labour promised that if they were in power they would be doing the same thing in any case. 

The banking sector continues to be caught up in scandal after scandal, with no sign of reform or retribution beyond piffling fines. Other sectors, such as the energy industry, chase the banks’ scandalous profit levels by inflicting excessive prices on consumers. 

According to the Sunday Times Rich List the richest 1,000 people have doubled their fortunes since the financial crash. While in the name of ‘Austerity’ the incomes of the 90% have been frozen or cut, and the prospect of retirement has been pushed further into the distance with less money.

Actually, it isn't just the 90% who have been screwed. Figures from the Paris School of Economics, giving the share of national income going to different groups, do show that the top 10% did very well in the 5 years leading to the 2008 crash. But dig a little deeper and you find some surprising figures.

The enrichment of the top 10% masks 

• how exceedingly well the top 0.05% have done, 
• how really well the top 0.1% to 0.05% have done, 
• how rather well the top 0.5% to 0.1% have done.
• how really badly the top 10% to 5% did.

Perhaps most suprisingly, the data shows the top 10% to 5% have done worse than the bottom 90%.

Now, as economic indicators recover to where they were before the banking crash the vast majority of us find ourselves marooned while the very wealthiest float off into greater prosperity. Corporate and personal tax cuts have been made by casting off large parts of public responsibilities into the hands of the private sector. Rights such as Legal Aid, free university education and welfare have been cut. Hospitals, schools, security, prisons, road sweeping and more have been outsourced and sold to the private sector where the wages of the many are lower and profits for the few higher. Cuts have been implemented by both Labour and Conservative that both parties promise to continue.

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

“Government Consumption” includes money spent buying goods and services. It does not include payments such as benefits and pensions. Government Consumption includes paying for public services such as health, education, transport, justice, defence and the like.

The reality is both Labour and Conservative have been helping the top teensy layer fill their boots by reducing the share for everyone else. Both parties fear each other far less than they fear the electorate noticing this. Both parties will do whatever they can to distract the debate from this - even if they have to throw Europe onto the fire to create a smokescreen.

In the year before the 2015 General Election we must remind ourselves how we have been sold out by successive governments. Politicians don't need reminding that they betrayed us, they are well aware of it. But they do need reminding that we know it, and for them to get our votes in 2015 they need to stop.

Read More

OFGEM to investigate British Gas for paying salesmen bonuses for inflating business customers’ bills

Including the Royal British Legion! KJ learns more from his mate, a British Gas salesman...

SOURCE DAILY MAIL: British Gas salesmen who double your bills 'were treated like celebrities and given free helicopter rides for ripping off customers'- British Gas paid staff bonuses for inflating business customers’ bills – and churches and charities were targeted because they had fewer resources to shop around. Employees who made the highest profits by ensuring customers were sold the most expensive deals possible were sent on holidays to places such as Monaco, Rome and Iceland. Employees selling gas at base price for a one-year contract earn £18, but if they double costs to 5.5p per unit over three years they earn £435. Their food and drink was paid for and often they were given spending money. Other rewards included vouchers, 3D TVs, laptops, theatre tickets and PlayStations. A whistleblower who won a holiday said: ‘You were treated as if you were a celebrity. They spent thousands on each person for these trips... We are encouraged to charge as much as we can. If the customer is a charity, or someone who doesn’t speak English, they are so easy to mislead, it’s gold dust to us. British Legion is great because the volunteers are elderly.”

OUR RELATED STORIES:

If mis-selling is a fraud, why aren’t bank and energy execs jailed? Especially when the law gives clear guidelines for jailing fraudsters

Graphs at a glance: Wholesale energy price data from OFGEM and NPower show the key excuse for energy price hikes has been a fib

Graphs at a glance: Energy companies' price hike tactics make switching futile

Mortality always rises in winter. But 1 in 5 of these 30,000 deaths are because people can't afford to heat their homes

Graphs at a glance: study shows fewer than 1 in 10 members of the public trust or regard as ethical banks and energy companies

Labour exposes OFGEM’s failure to stop the Big 6 energy firm rip-off. Why didn’t they do that when they were in power?

Graphs at a glance: OFGEM finally does something useful by publishing wholesale energy prices! See energy companies' bogus reason for hiking prices exposed!

What Miliband and Cameron surely know already: how the energy firms hide their profits

 

Read More

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

Back to the drawing board: Duncan Smith’s Universal Credit redefined as 'new project' after successive delays

Universal credit, the government's recasting of the welfare benefits system, has had to be reorganised so fundamentally that the government watchdog responsible for grading its implementation has judged that it is now an entirely new project. In its annual assessment of the implementation of nearly 200 major infrastructure projects, the Major Projects Authority (MPA) has listed universal credit as "reset", the only one to be listed as going back to the drawing board. The scheme has been dogged with IT design faults, leading to successive delays. Universal credit is the flagship project of Iain Duncan Smith's Department for Work and Pensions (DWP). Ministers started implementing it three years ago, and have been criticised by successive watchdogs for failing to come clean about the problems the DWP has experienced with the technology. GUARDIAN

British Gas salesmen who double your bills 'were treated like celebrities and given free helicopter rides for ripping off customers'

British Gas paid staff bonuses for inflating business customers’ bills – and churches and charities were targeted because they had fewer resources to shop around. Employees who made the highest profits by ensuring customers were sold the most expensive deals possible were sent on holidays to places such as Monaco, Rome and Iceland. Employees selling gas at base price for a one-year contract earn £18, but if they double costs to 5.5p per unit over three years they earn £435. Their food and drink was paid for and often they were given spending money. Other rewards included vouchers, 3D TVs, laptops, theatre tickets and PlayStations. A whistleblower who won a holiday said: ‘You were treated as if you were a celebrity. They spent thousands on each person for these trips... We are encouraged to charge as much as we can. If the customer is a charity, or someone who doesn’t speak English, they are so easy to mislead, it’s gold dust to us. British Legion is great because the volunteers are elderly.” DAILY MAIL

Bank of England governor: capitalism doomed if ethics vanish

Capitalism is at risk of destroying itself unless bankers realise they have an obligation to create a fairer society, the Bank of England governor has warned. Mark Carney said bankers had operated a "heads-I-win-tails-you-lose" system. He questioned whether traders met ethical standards and said that those who failed to meet high professional standards should face ostracism. Speaking at a City conference, the Bank's governor warned that there was a growing sense that the basic social contract at the heart of capitalism was breaking down amid rising inequality. "We simply cannot take the capitalist system, which produces such plenty and so many solutions, for granted. Prosperity requires not just investment in economic capital, but investment in social capital." In a strongly worded critique of City behaviour in the run-up to the financial crisis, Carney said market radicalism and light-touch regulation had eroded fair capitalism, while scandals such as the rigging of Libor markets had undermined trust in the financial system. "Just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself. To counteract this tendency, individuals and their firms must have a sense of their responsibilities for the broader system." GUARDIAN

80% of small firms think they get 'poor deal' from big six energy suppliers

Only a quarter of FSB members thought there was enough competition in the energy market, echoing concerns of many British households. The FSB has presented its findings in a response to a consultation by regulator Ofgem, which ends on Friday, on whether the energy market should be referred to the Competition and Markets Authority. "It's clear from our research that many small businesses don't trust the big energy suppliers to deliver a smarter, fairer and more transparent billing process as four in five of our members say that energy companies don't care about them," said John Allan, FSB chairman. GUARDIAN

Royal Mail says postal deliveries to remote areas under threat

Royal Mail has warned that rivals are being allowed to cherry pick easy and profitable deliveries in towns and cities without having to run services to isolated homes such as on Scottish islands. Moya Greene, Royal Mail's chief executive, said rival TNT Post UK's ability to pick off profitable routes in big cities was "striking at the economics of the universal service obligation" – its statutory duty to deliver to every address in the country, six days a week, at the same price. Greene called for "timely regulatory action" from the regulator Ofcom to prevent undercutting from rivals threatening the universal service. But the boss of TNT Post UK, Nick Wells, said Royal Mail should stop "whingeing". He insisted his firm's competition posed "absolutely no threat to the universal service". An Ofcom spokesman said: "We do not believe that there is presently a threat to the financial sustainability of the universal postal service... We would expect Royal Mail to take appropriate steps to respond to the challenge posed by competition, including improving efficiency." GUARDIAN

At last, Tesco drops in-store Eon promotion after energy firm’s £12m mis-selling fine

A deal that let energy giant Eon sell electricity and gas tariffs to customers as they shopped in Tesco has been quietly dropped by the supermarket. Simon Icke, an unpaid independent campaigner against bad practice in the energy market, says Eon sellers’ use of ‘charm and chatter’ and the bait of Tesco Clubcard points glossed over the fact that, without their bills to hand, customers wouldn’t know what tariff they were on or whether they could save money by switching to Eon ‘all for the sake of £10 in Tesco vouchers’. The deal existed in about 40 stores. The revelation follows news of the supplier’s record £12 million fine by energy regulator Ofgem for mis-selling between June 2010 and December 2013, with a redress bill that could reach £8 million. A spokeswoman for Tesco says: ‘Customers told us their concerns so we have reviewed which companies we allow into stores. We are moving to a new policy, which will not include third party utility companies.’ DAILY MAIL

Degree courses 'not value for money', say one in three students

A survey of 15,046 UK students found they have just 10 minutes extra with university lecturers despite the rise  in fees since 2012. The findings are revealed by the Higher Education Policy Institute (Hepi) and the Higher Education Academy (HEA). The research found today's students in England were more likely to say their course was poor value compared to 2012 - before the fee hike. One third of current first- and second-year students (33%) said they were receiving poor or very poor value for money, compared with 18% in 2012. And just 36% of these students thought their course represented good value for money, compared with 52% in 2012. The survey also found 31% said they would definitely or maybe have chosen another course if they were to have their time again. The survey found that in the first and second years of their degree, undergraduates have an average of 14.2 hours of "contact" time - for example time spent in lectures and seminars, and spend another 14.3 hours on average in private study. This is much less than the 40 hours a week of study suggested in the Quality Assurance Agency's (QAA) guidelines. BBC NEWS

Church of England launches Church Credit Union Network

The Church of England has launched a new scheme to promote responsible lending, which will see people being given financial advice in church. The Church Credit Champions Network (CCCN) will promote the use of credit unions rather than payday lenders. Sir Hector Sants', former boss of the FSA and briefly boss of compliance at Barclays, spoke at the launch of Church of England's Church Credit Union Network. In a speech, he listed the scale of the problem:

• The debt of the average UK household, excluding mortgages, is now almost £13,000
• 7 million people are using high cost credit providers
• 1m payday loans are taken out each month
• 1.4 m people have no bank account

Christians Against Poverty, the debt advice charity, reports the following statistics about their debt advice clients:

• 36% have contemplated or attempted suicide.
• 67% visited their GP due to the negative effects of debt.
• 76% said that their financial situation had adversely affected their primary relationship.
• 23% said their relationship had broken down entirely.
• 42% were prescribed medication due to the negative effects of debt.

The Archbishop of Canterbury criticised of payday lenders in July last year. Justin Welby said he was trying to put such lenders "out of business" by giving them greater competition. CHURCH OF ENGLAND

Antidepressant use soared during recession in England, study finds

The use of antidepressants rose significantly in England during the financial crisis and subsequent recession, with 12.5m more pills prescribed in 2012 than in 2007, a study has found. Researchers from the Nuffield Trust and the Health Foundation identified a long-term trend of increasing prescription of antidepressants, rising from 15m items in 1998 to 40m in 2012. But the yearly rate of increase accelerated during the banking crisis and recession to 8.5%, compared to 6.7% before it. The report also found that rises in unemployment were associated with significant increases in the number of antidepressants dispensed and that areas with poor housing tended to see significantly higher antidepressant use. GUARDIAN

Read More

Graphs at a glance: Financial Reporting Council (FRC) says just 2% of bank and building society audits were up to scratch.

In April 2011 the US Senate held a hearing on "The Role of the Accounting Profession in Preventing Another Financial Crisis". Kicking off the hearing the chairman of the Senate committee, Senator Jack Reed, commented:

"Prior to the collapse or rescue of nine major financial institutions in 2007 and 2008, they each received unqualified audit reports within months of their demise from various major accounting firms. So this hearing is not about one company or one auditor. This is about systemic weaknesses in the audit process that may continue to impair investor confidence and provide inadequate information to the investing public and to directors of public companies and to the markets in general.

The costs of these problems are staggering. The Financial Crisis Inquiry Commission estimated that nearly $11 trillion in household wealth was lost through retirement accounts and life savings being diminished in the crisis. Auditors who have the responsibility for examining and reporting on the companies' books and records in the cases I have cited sounded no distinctive and helpful alarms prior to the demise of these companies.

As such, serious questions have been raised about the quality of financial reporting practices and about the quality of audits that should have revealed key financial irregularities or the poor status of these companies."

In May 2014 The UK's Financial Reporting Council (FRC), "the UK’s independent regulator responsible for promoting high quality corporate governance and reporting", produced a report stating only 2% of Bank and Insurance Company audits were "good".
Every other sector reported on had more than 10% categorised as "good". For Banks and Building Societies 64% had more than "limited" issues, with nearly 1 in 5 needing "signficant improvements" to their audits.

Have lessons been learned? The Parliamentary Commission on Banking Standard said in its report of June 2013 that pay per person in banks was higher in 2012 than just before the banking crash.

The Bank of England's Fourth Quarter Bulletin for 2013 showed that loan-to-value (LTV) ratios for mortgages are higher than just before the crash:


Lessons? What lessons?

Read More

Is a vote for UKIP a vote for its policies? Or is it a protest vote?

 

SOURCE BBC NEWS: UK European election results

SOURCE BBC NEWS: England council election results

OUR RELATED STORIES:

Graphs at a glance: The effect of political fibbing exposed by Office of National Statistics report showing fewer than one in three of us 'tend to trust' government

Graphs At A Glance: NI and Income taxes make hiring costs too expensive for employers? Ours are the lowest in the EU, bar Malta, Ireland and Cyprus

Graphs at a glance: Workers driven from full to part time work is the only reason employment is holding up

Graphs at a glance: Budget 2014 document shows we’re growing through borrowing. Again. That's why Britain needs a pay rise

No rise in the number of Housing Benefit claimants for 30yrs but the bill has quadrupled. Why? Declining new builds, rising rents. See the graphs

Build more affordable homes, reverse the property bubble, and we'll save billions

The Top 1% pay more income tax? ‘cos their income’s doubled since 1995 whilst bottom 90%'s has stagnated

Graphs at a glance: Government spending on education, health and other services are being cut to pre-1948 levels

Graphs at a glance - School class sizes in England are among the largest in the OECD

Read More

Will the Tories and Labour learn the secret of UKIP's success? It's all about Trust.

Trust isn’t about knowing someone will do the right thing. It is about knowing what someone will do. UKIP seems trustworthy because what the party says is such a mix of keen insight as well as crass stupidity that they can’t be making it up. 

If UKIP were crafty and untrustworthy they wouldn’t be quite so crass. Whether we agree with them or not we trust them to mean what they say. Which means we know whether or not to vote for them. 

On the other hand we don’t trust the Tories because of the things they do. And we don’t trust Labour because of the things they don’t do.

The Tories are at least consistent. Whether in power or not they argue that giving the rich more will benefit everyone. Growing inequality in the UK shows that this isn’t actually true. Public services are being cut (legal aid, free universities, NHS, schools and so much more) that are needed because most people aren’t paid enough to buy these services privately. OECD figures show that without tax transfers 30% of Britons would be in poverty instead of the current 10%. The Tories want to let those who have money keep it, and are not fussy what they have to say and do to achieve this. Tory calculated dissembling wins the votes of people who watch the 1% get much richer, the 10% get somewhat richer, but leave the 90% to stagnate and fall back. In a democracy you need the votes of more than the top 10% to win power. The Tories win elections by fooling enough of the balance. Eventually people get fed up being made fools of.

Of course, much of what the Tories do currently was started by Labour when it was in government. Since Tony Blair, Labour only behaves like Labour should when in opposition. When in power Labour becomes Tory, abandoning its core supporters. Civil liberties in modern times were never curtailed faster than under the recent Labour government. University fees, Private Finance Initiatives, privatisations, outsourcing, the chronic decline in manufacturing, giving the finance industry carte blanche to rip off and ruin, stagnation of wages of the 90% all happened during the Labour government.

If during their leaderships William Hague and Michael Howard had the wit to instruct their party to vote for Tony Blair’s policies instead of against, they would have exposed that Labour was behaving like the Tories. Labour support may have drained away a decade before it actually did. And Labour would have reverted to being Labour sooner.

Whether that would have been a good thing or not is another question. But the 2014 European election result was Britons wishing pox on both their houses, Tory and Labour.  At least UKIP is what it says it is.

Now Labour and Tory will scuttle to win over UKIP supporters by trying to out-UKIP UKIP. But they will do this in the wrong way, by trying to be tough on immigrants. Will they work out that the thing that attracts many voters to UKIP isn’t their xenophobia, but their straightforwardness?

UKIP’s 25% of the 2014 local election vote, where about 40% of the electorate voted, is only 10% of the electorate. On the other hand 60% of the electorate didn’t turn out to vote at all. It is that 60% of non-voters political parties should aim for. Trying to pry votes from UKIP’s 10% with the crowbar of heightened xenophobia isn’t good for anyone. Trying to coax voters from the 60% who didn’t vote at all is good for everyone.

How is this done? In the end it is the economy. Politicians need to stop snouting around for ways to trick a majority into voting for policies that do them no good. Globalisation and technology means the economy will grow best with fewer working Britons. Labour and Conservative have concluded these excess citizens should be laid off or pushed down into lower paid more menial work. However a Democracy belongs to everyone. Labour and Conservative need policies that will actually improve the lot of the majority, rather than running covert operations to enrich the few by excluding the many.

Source organisation: Paris School of Economics http://topincomes.g-mond.parisschoolofeconomics.eu/#Database:

A democracy elects government for the benefit of the majority. Recent governments have governed in the interests of the small minority. They have evidently won power by promising things they then fail to do.

And that’s the wonder of UKIP. You may or may not think they are ghastly. But you can trust they probably are what they say they are.

Read More

Will the Tories and Labour learn the secret of UKIP's success? It's all about Trust.

Trust isn’t about knowing someone will do the right thing. It is about knowing what someone will do. UKIP seems trustworthy because what the party says is such a mix of keen insight as well as crass stupidity that they can’t be making it up. 

If UKIP were crafty and untrustworthy they wouldn’t be quite so crass. Whether we agree with them or not we trust them to mean what they say. Which means we know whether or not to vote for them. 

On the other hand we don’t trust the Tories because of the things they do. And we don’t trust Labour because of the things they don’t do.

The Tories are at least consistent. Whether in power or not they argue that giving the rich more will benefit everyone. Growing inequality in the UK shows that this isn’t actually true. Public services are being cut (legal aid, free universities, NHS, schools and so much more) that are needed because most people aren’t paid enough to buy these services privately. OECD figures show that without tax transfers 30% of Britons would be in poverty instead of the current 10%. The Tories want to let those who have money keep it, and are not fussy what they have to say and do to achieve this. Tory calculated dissembling wins the votes of people who watch the 1% get much richer, the 10% get somewhat richer, but leave the 90% to stagnate and fall back. In a democracy you need the votes of more than the top 10% to win power. The Tories win elections by fooling enough of the balance. Eventually people get fed up being made fools of.

Of course, much of what the Tories do currently was started by Labour when it was in government. Since Tony Blair, Labour only behaves like Labour should when in opposition. When in power Labour becomes Tory, abandoning its core supporters. Civil liberties in modern times were never curtailed faster than under the recent Labour government. University fees, Private Finance Initiatives, privatisations, outsourcing, the chronic decline in manufacturing, giving the finance industry carte blanche to rip off and ruin, stagnation of wages of the 90% all happened during the Labour government.

If during their leaderships William Hague and Michael Howard had the wit to instruct their party to vote for Tony Blair’s policies instead of against, they would have exposed that Labour was behaving like the Tories. Labour support may have drained away a decade before it actually did. And Labour would have reverted to being Labour sooner.

Whether that would have been a good thing or not is another question. But the 2014 European election result was Britons wishing pox on both their houses, Tory and Labour.  At least UKIP is what it says it is.

Now Labour and Tory will scuttle to win over UKIP supporters by trying to out-UKIP UKIP. But they will do this in the wrong way, by trying to be tough on immigrants. Will they work out that the thing that attracts many voters to UKIP isn’t their xenophobia, but their straightforwardness?

UKIP’s 25% of the 2014 local election vote, where about 40% of the electorate voted, is only 10% of the electorate. On the other hand 60% of the electorate didn’t turn out to vote at all. It is that 60% of non-voters political parties should aim for. Trying to pry votes from UKIP’s 10% with the crowbar of heightened xenophobia isn’t good for anyone. Trying to coax voters from the 60% who didn’t vote at all is good for everyone.

How is this done? In the end it is the economy. Politicians need to stop snouting around for ways to trick a majority into voting for policies that do them no good. Globalisation and technology means the economy will grow best with fewer working Britons. Labour and Conservative have concluded these excess citizens should be laid off or pushed down into lower paid more menial work. However a Democracy belongs to everyone. Labour and Conservative need policies that will actually improve the lot of the majority, rather than running covert operations to enrich the few by excluding the many.

Source organisation: Paris School of Economics http://g-mond.parisschoolofeconomics.eu/topincomes/

A democracy elects government for the benefit of the majority. Recent governments have governed in the interests of the small minority. They have evidently won power by promising things they then fail to do.

And that’s the wonder of UKIP. You may or may not think they are ghastly. But you can trust they probably are what they say they are.

Read More

A guide on how to overcome the servant problem. A salutory read when you are selecting or electing domestic or public servants.

As we move from election to election we offer you this useful guide, published in 1899, to dealing with [public] servants. 

Pay particular attention to the sections warning what happens when you select someone without well checked references! Truly awful!


For those of you with no eyes to see, the book has an audio function - i.e. it will read itself to you (go to the full screen mode to hear this, it is very clever!).

Read More

A guide on how to overcome the servant problem. A salutory read when you are selecting or electing domestic or public servants.

In the aftermath of local and European Parliament elections, we offer you this useful guide, published in 1899, to dealing with servants. 

Pay particular attention to the sections warning what happens when you select someone without well checked references! Truly awful!


For those of you with no eyes to see, the book has an audio function - i.e. it will read itself to you (go to the full screen mode to hear this, it is very clever!).

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 22nd May)

The rich get richer: Britain's wealthiest DOUBLE their fortunes since the financial crash and are now worth £519billion

The fortunes of the 1,000 richest men and women in the UK rose by 15.4% in the last year. It also means that total wealth has doubled since 2009, when the top 1,000 were worth a measly £258billion. The figures were revealed in the Sunday Times Rich List. The list is based on 'identifiable wealth' - including land, property, other assets such as art and racehorses, or significant shares in publicly quoted companies. It excludes bank accounts, which the Sunday Times has no access to. Figures released by the Office for National Statistics last week revealed that there is a monumental gap between the rich and the poor in the UK, with the wealthiest 1 per cent owning the same amount as the 55 per cent poorest in the UK. DAILY MAIL

Revealed: Why millions WON'T get the £155 new state pension they're expecting

A major pledge of the new pension was that everyone who had paid all their National Insurance contributions would be guaranteed to get £155 a week. But a Money Mail investigation into the small print of the new flat-rate pension reveals as many as four in five older workers could miss out on the full flat-rate state pension of £155 a week when it is introduced in 2016. And millions face losing thousands of pounds in inflation-linked increases on company pensions. Disturbingly, not even the Government has calculated how much less than the promised amount people will end up getting. DAILY MAIL

Miliband sets out Labour's minimum wage plans. Tories and LibDems promise a rise too

The party will announce an exact figure - covering the years 2015 to 2020 - nearer the general election. Both the Conservatives and Liberal Democrats have already said they want a rise in the minimum wage. However any major increase is likely to be criticised by business groups worried that it would drive up costs and damage competitiveness. Mr Miliband said it was a "scandal" that there were five million people in work who "can't make ends meet". The Prime Minister's official spokesman said Downing Street believed that as a result of economic growth there could be a real terms increase in the level of the minimum wage, but that it should remain a matter for the Low Pay Commission to recommend its level. BBC NEWS

New RBS finance chief handed £1.9m 'golden hello' reigniting controversy over bankers' 'fat cat' pay

Ewen Stevenson was awarded 584,506 shares on his first day in the job on Monday to compensate him for payments he forfeited at his previous employer Credit Suisse. RBS shares are currently worth 326p each, up 2.3p on the day. Stevenson will enjoy an annual package of £1.9million a year, including a £800,000 salary, £280,000 in pension contributions, and £26,250 in benefits. He will also receive a controversial £800,000 fixed shares ‘allowance’, used by banks including RBS to swerve the EU bonus cap. Stevenson was recruited after Nathan Bostock resigned in December to join Santander UK after just ten weeks in the role. The revelations turn up the heat on the state backed bank, which is still 81 per cent owned by the taxpayer and slumped to a £8.2billion loss last year. RBS was accused of wasting taxpayers’ money after handing a £3.2million ‘golden hello’ to current chief executive Ross McEwan when he joined as retail boss of the bank in August 2012. The Government last month blocked RBS from paying bonuses twice the size of salaries - but approved the new pay measure at Lloyds. DAILY MAIL

Ofgem penalises Scottish Power for overcharging on energy bills

For years power firms have imposed higher charges on customers who elect to receive a quarterly bill rather than pay by monthly direct debit. Following an investigation, Ofgem has concluded that the price differential charged by Scottish Power, which supplies around 5m homes, was unfair. As a result the Glasgow-based firm has agreed to pay £750,000 to Energy Best Deal – a public awareness campaign run by Citizen's Advice. But affected customers will not be getting a refund. The £750,000, which is not technically a fine, will be used to help those on low incomes reduce their bills and get help if they are falling behind with energy payments. Last week the energy regulator ordered rival supplier E.ON to pay £12m to its customers after an investigation into mis-selling found "extensive poor practices". It was the largest-ever penalty levied by Ofgem. In October 2013, Ofgem ordered Scottish Power to pay back £8.5m to customers after an investigation found that its doorstep and telephone sales agents had misled customers. GUARDIAN

Energy price row reignited after SSE posts record £1.5bn annual profit

The row over high energy prices was reignited after Britain's second largest supplier reported annual profits of more than £1.5bn. This is despite them losing hundreds of thousands of customers following their price hike last year. SSE said the 9.6% year-on-year increase had largely come from its wholesale not its retail business but critics described the figures as a "kick in the teeth" for consumers. And there was embarrassment for energy regulator with figures showing that SSE's electricity transmission business which is overseen by Ofgem recorded an almost 50% rise in profits to £137m. Critics were quick to attack the company. "SSE's announcement of a £1.55bn profit is a kick in the teeth for consumers when their prices went up by 8.2% last year. So we're stunned that they've announced a massive profits increase of 9.6% after losing 370,000 customers in the past year," said Jonathan Senior, head of research at collective switching and low energy campaign, ThisIsTheBigDeal.com. GUARDIAN

Global Swiss bank pleads guilty to helping 'tax cheats', fined $2.6bn by US regulator

Credit Suisse’s $2.6bn payment is the highest in a US criminal tax investigation to date. However, as part of the agreement with US regulators, the bank will not lose its banking licence in the US. US attorney general Eric Holder said: "The bank went to elaborate lengths to shield itself, its employees, and the tax cheats it served, from accountability for their criminal actions... They subverted disclosure requirements, destroyed bank records, and concealed transactions involving undeclared accounts by limiting withdrawal amounts and using offshore credit and debit cards to repatriate funds." Since 2011 US authorities have indicted eight Credit Suisse employees who helped clients evade taxes. US prosecutors are also chasing more than a dozen other Swiss banks for allegedly helping wealthy Americans dodge US taxes, and at the press conference, they hinted that there would be more settlements to come. In 2009, another Swiss bank, UBS, settled similar charges with US regulators for $780m as well as an agreement in which the bank would give US authorities the names of its so-called "secret" account holders. BBC NEWS

Vince Cable warns booming house prices are destabilising UK economy

Business secretary Vince Cable has warned booming house prices are destabilising the economy and any sane person should worry about what is going to happen when interest rates rise as the economy returns to normal. He also warned that household debt in relation to income is set to become significantly higher in the UK than almost anywhere else, and contains serious dangers that represent "a real, real, real worry" for policymakers and homeowners. He said levels of household debt were forecast to surpass those reached before the financial crash in 2008. His comments have emerged as a study predicted that one in 10 mortgage payers risk becoming trapped on unaffordable deals as interest rates rise over the next four years. GUARDIAN

HMRC says £10bn, but tax expert says we lose £40bn each year from “hidden” sales

The Treasury is losing £40bn a year due to a shadow economy where firms and individuals deliberately hide sales from the taxman, according to a leading tax justice campaigner, Richard Murphy. He said it is wrong to think most of the tax lost to the shadow economy related to self-employed workers. The lion's share, he says, is from 1.1m companies that tell HMRC they trade in the UK at an average loss of about £10,000, and from a further 400,000 companies he estimates trade in the UK but do not file a tax return. The report has been swiftly rejected by HMRC as "seriously flawed", although Murphy said it had been peer reviewed by academics and other tax experts. Murphy himself is an accountant and tax specialist who until March 2013 sat on an HRMC panel of anti-avoidance experts. He is leading a campaign questioning the accuracy of HRMC figures on Britain's tax gap. Future reports due this summer will include a challenge to HRMC's figures on tax avoidance, which do not capture the activities of many multinationals shifting profits from high-tax jurisdictions such as the UK to offshore tax havens. The reports will also challenge HMRC figures on inheritance tax due, which he argues greatly underestimated the scale Britain's property and financial wealth. GUARDIAN

Backlash over banks' fee-paying accounts: Complaints triple amid fears of new mis-selling scandal

Around 9m people have a packaged account in the UK. But in an echo of the payment protection insurance (PPI) scandal, many are paying for perks they never knew existed, do not want or cannot benefit from. As a result, thousands of customers that have paid up to £300 a year for the perks have had their complaints routinely rejected by the high street banks, forcing them to take their case to the independent disputes arbitrator, the Financial Ombudsman Service (FOS). 78% of these complaints were upheld in the customer's favour after being rejected by the bank. Banks are keen to sell them because they are far more profitable than ordinary current accounts, which are free if in credit. Typical packaged account benefits include travel insurance, breakdown cover and mobile phone insurance. Some also offer free music downloads or free National Trust days out. But pensioners, for example, may find they are unable to claim on their travel insurance policy because the small print contains an age limit of 65. The FOS said a growing number of complaints are from customers who said their accounts had been 'upgraded' without their knowledge. The total number of all complaints against banks were up by 1% on the previous year to a record of 512,167. Banks have already paid out over £14bn in compensation for mis-selling PPI to customers. Critics say the level of customer discontent over packaged accounts shows that the banks have a 'rotten culture' and that lenders may become embroiled in a new mis-selling scandal. DAILY MAIL

Read More

Gary Barlow OBE caught using a scheme, designed to promote the arts, to dodge tax

SOURCE BBC NEWS: Take That star Gary Barlow should keep OBE - Cameron

David Cameron has rejected calls for Take That singer Gary Barlow to hand back his OBE after it emerged he had put money into a scheme ruled to be set up for tax avoidance purposes. Mr Cameron said he was against "aggressive tax avoidance schemes". He said: "If people go after these schemes and aggressively avoid tax they're making it the case that everyone else has to pay higher taxes as a result... We should be very clear: tax evasion is illegal, you can be prosecuted for that, you can go to prison. Tax avoidance is, in these cases, these very aggressive tax avoidance schemes, they are wrong and we should really persuade people not to do them, and that's why we have these court cases where the court looks at whether a scheme is more about avoiding tax than anything else." But asked whether he agreed that Barlow should consider returning his OBE, Mr Cameron said: "I don't think that is necessary, frankly... Gary Barlow has done a huge amount for the country, he's raised money for charity, he has done very well for Children in Need. The OBE was in respect of that work and what he has done."

OUR RELATED STORIES:

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

The Top 1% pay more income tax? ‘cos their income’s doubled since 1995 whilst bottom 90%'s has stagnated

Read More

Regulation in Britain: Compare and contrast regulation of Citizens and of Companies. Company executives pay piffling fines, ordinary citizens do jail time.

In May 2014 the energy regulator OFGEM boasted about its latest ‘record fine’: £12 million inflicted on E.on. OFGEM’s press release stated:

• E.ON’s large scale mis-selling results in biggest supplier payout to consumers 

• Ofgem found management arrangements were insufficient to protect against mis-selling

OFGEM has the power to fine upto 10% of revenue. E.ON’s UK revenue in 2013 was £9.9 billion. The £12million fine, about 0.1% of revenue, is not even a drop in that ocean of cash.

Money is the one thing that is not in short supply for Energy companies. They are awash with it. Fraudulent behaviour by our Energy and Financial sectors have been ‘punished’ by taking from them that which they have most of: money taken from their customers. Like fining Billy Bunter a doughnut – he may not like it, but he has plenty more. The loss of a doughnut will not reform him.

Fraud is directed by people, not companies. Directors don’t fear fines – after all it is almost inevitably the company that pays them. But while they have more than enough money to brush off fines, they have about the same amount of time as anyone else. A year in jail is a year in jail, whoever you are.

The Sentencing Council, appointed by the Lord Chief Justice and the Lord Chancellor of the UK, provides guidance to the British Justice System. Here is the guidance when it comes to frauds by ordinary citizens:

• "Confidence Fraud" (not unlike doorstep selling by energy companies) for sums of £500,000 or more: 5-8 years custody 

• "Possessing, making or supplying articles for use in fraud" (not unlike PPI insurance products): 2-8 years custody

The Sentencing Council recommends a "benefits fraudster" convicted of taking more than £20,000 should face 18 months to 3 years in prison. And the Crown Prosecution Service (CPS) recommends that if a postman or an ordinary bank clerk pinches £17,500 he goes to jail for 21 months. On the other hand the directors of banks pinching billions in PPI fraud just get a bonus. 

Here's what the CPS says in its "Guideline Breach of Trust Case"

R v CLARK [1998] 2 Cr.App.R. (S.) 95
Save in very exceptional circumstances, where a person in a position of trust, for example an accountant, a solicitor, a bank employee or a postman has used his trusted and privileged position to defraud his partners, clients employers or the general public of sizeable sums of money immediate imprisonment is inevitable unless there are exceptional circumstances or the amount of money involved is very small. The amount defrauded is an important factor and the following guidelines apply where the sums involved are:

• Less than £17,500   up to 21 months imprisonment
• £17,500 to £100,000   2-3 years
• £100,000 to £250,000  3-4 years
• £250,000 to £1 million  5-9 years
• £1 million or more   10 years +"

Is there any doubt that a bit of jail time wouldn’t rapidly and abruptly stop the frauds by our bluest-chip companies? 


Here are some more examples of multi-million pound scallywaggery that has been let-off with piffling penalties:

The OFGEM2012-13 report includes:

"SSE had put more than 20,000 customers on more expensive tariffs. It gave misleading scripts to its sales agents and most of their monitoring activity was carried out by line managers who received commission on the sales their reportees brought in. SSE’s senior management did not pay enough attention to what its people were doing on the ground. We fined SSE £10.5m."

"E.ON committed to pay back around £1.4 million to about 94,000 customers who were wrongly charged exit fees or overcharged after price rises. E.ON also agreed to make an extra goodwill payment of around £300,000 to a consumer fund they run with Age UK."

"In May 2012, we confirmed our decision on EDF, which we originally made in March 2012. EDF had acted in breach of its marketing licence conditions. We agreed measures with EDF worth £4.5 million to help vulnerable consumers."

In February 2014 the Financial Conduct Authority (FCA) reported that pensioners were losing up to £11 million each year, a cumulative £230 million over their retirements, due to poor annuities:

"we estimate that the improvement in annual income would be between £6m and £11m, and the lifetime benefit potentially available would be between £115m and £230m for the group of consumers buying annuities from their existing pension providers each year."

The banks have infamously paid billions in PPI compensation. In May 2014 the FCA website was saying:

“A total of £329m was paid in February 2014 to customers who complained about the way they were sold PPI. This takes the amount paid out since January 2011 to £14.3bn.”

.
.

Read More