Graphs at a glance: "Pension Schemes Bill" legislation makes it easier for companies to jettison retired staff

In June 2014 Parliament started debating a key change to the nation's pensions, the "Pension Schemes Bill". According to the Department of Works and Pensions' press release, "Public backing means full steam ahead for pension reforms".

As it apparently already has your backing, dear fellow ripped-off Britons, we thought you should know more about what you are so keen on. 

The proposed legislation includes worrying provisions relating to independent trustees, indexation, and more. But for the purpose of this post, we shall focus on the "new" type of pension being introduced.

Britons have been used to three main pension options:

• Defined Benefit (DB): Where you are certain how much pension you will get, usually based as a percentage of your salary (final salary; career average; or whatever).
• Defined Contribution (DC): Where you only know how much pension you will get when you buy an annuity when you retire.
• No Private Pension: Where your employer makes no contribution, and you depend on the state pension plus welfare and any other savings and investments you yourself may have.

http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-332157

If you have a Defined Benefit pension the responsibility is on your employer to ensure there is enough money available in the pension fund to guarantee you will get the agreed percentage of your salary during retirement. This is risky for the employer, as the commitment is made when you start your job and only ends when you and your spouse drop dead. In contrast, with Defined Contribution the employer joins you in contributing to your pension pot. However when you retire it's up to you to use the pension pot, while the employer walks away unencumbered.

It is said the Defined Benefit puts the risk on the employer, while Defined Contribution puts the risk on the employee. The new "Pensions Schemes Bill" comes up with a new "Shared Risk" pension.

Now if you thought "Shared Risk" meant the employer and the employee sharing the risk, you'd be wrong. From the employer's point of view "Shared Risk" is the same as "Defined Contribution". Great for the employer, as it makes its cheaper contributions on a "pay and forget" basis just like for Defined Contribution.

In reality, the only new thing about this new type of pension is its name. Ministers have experimented with various names hoping to disguise what it actually is: "Defined Ambition"; "Defined Aspiration"; "Shared Risk"; "Collective Defined Contribution". Whatever the name of this particular rose, the key thing is it is cheaper for the employer. The typical employer contribution to Defined Benefit is 15% of your salary, but for Defined Contribution it is less than 8%. And like Defined Contribution, if the pension pot doesn't grow as expected over time then that's not the employer's problem - it's yours.

"Shared Risk" actually means you are sharing the risk with other employees, while the employer itself is off the hook. Not unlike a Group Personal Pension (except unrelated companies can be in the 'group'), which is another type of Defined Contribution pension. This basically means rather than being alone in a boat without a paddle, you are grouped in a canoe without any paddles.

All this is not aimed at helping small employers. Showing sympathy for those who aren't strong enough to take the risk is not a priority. 

The reality is small companies already don't really provide Defined Benefit schemes. ONS figures for 2013 show for companies with up to 99 employees only 5% of staff are on Defined Benefit schemes. (For companies with 1 to 12 staff 90% of employees have no company pension; for companies with 13 to 99 staff 75% have no company pension).

This change is for the benefit of large companies, employing over 1,000 staff. For these companies ONS figures show 45% of staff in 2013 were on Defined Benefit pensions.

(As the graphs show, whatever size company you work for the lower your pay the less your employer cares about your retirement).

This new legislation has played fast and loose with the word "Defined". Nothing is "Defined" in this new type of pension. The legislation is equally cavalier with the word "Promise". In a particularly risible manner Section 5 draws a distinction between a "full pensions promise" and a "pensions promise".

• Full Pensions Promise:
  "(a) the scheme provides for there to be a promise, at all times before the benefit comes into payment, about the level of the benefit, and
  (b) the level of the benefit is to be determined wholly by reference to that promise in all circumstances."

• Pensions Promise:
  "there is a “pensions promise” in relation to a retirement benefit if the scheme provides for there to be a promise, at a time before the benefit comes into payment, about the level of the benefit."

What is the distinction? A "Full Pensions Promise" is a commitment made at the start of your employment. On the other hand a "Pensions Promise" can be made any time up to the moment before you retire - no different to buying an annuity with a Defined Contribution pension (which is already a mis-selling scandal in its own right).

Britain is a rich country, getting richer. Britain is also unequal, getting more unequal. The share of GDP going to employees, in forms including salary and pensions, has fallen. This pension change means the employee share will get less.

The DWP claims "Public backing means full steam ahead for pension reforms". Full steam maybe, but Public backing? Really?

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Police to re-consider investigating Wonga for sending bullying letters from fake solicitors to 45,000 customers

Fee, KJ and Chris do some maths...

SOURCE DAILY MAIL: Why isn't Wonga in the dock? Fury at payday lender over bogus legal letters used to bully debtors

Britain’s biggest payday lender was yesterday named and shamed by the City watchdog, the Financial Conduct Authority. The FCA ordered it to pay more than £2.6million in compensation to 45,000 customers who received the bogus letters. But consumer groups say there is clear evidence of a criminal deception and insist the police should be brought in. While the company presents itself as the ethical face of the payday loans industry with its friendly TV ad puppets, an investigation by the FCA found extensive evidence of ‘thuggish’ behaviour. Among Wonga’s victims threatened by the fake legal team was a woman who missed repayments because she was in hospital recovering from a miscarriage. The FCA said Wonga sent letters to customers in arrears from what appeared to be two law firms, called ‘Chainey, D’Amato & Shannon’ and ‘Barker and Lowe Legal Recoveries’ – but these two companies were invented by Wonga to put pressure on customers. In some cases extra charges were added to the outstanding debt to cover the cost of sending these threatening letters. Despite the damning evidence, the watchdog added that £2.6million is the biggest compensation order it can impose on Wonga – because the wrongdoing occurred before tougher laws were implemented last year. 

SOURCE BBC NEWS: Police to re-consider Wonga investigation

The City of London Police have confirmed they will re-consider opening a criminal investigation into Wonga. Previously they had ruled it out, saying the case should be left to the regulator. But they said now the regulator's investigation had finished they would "be reassessing whether a criminal investigation is now appropriate." Wonga sent letters from non-existent law firms to customers in arrears between 2008 and 2010. Earlier on Friday, the Law Society, which represents solicitors in England and Wales, called for an investigation by the Met Police for "dishonest activity" in sending letters from fake lawyers.

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Rip-off News round-up. Our pick of the last week's media (Thu 26th June)

Barclays shares fall 6.5% on new fraud accusation

The New York attorney general has filed a fraud lawsuit against Barclays. The lawsuit alleges the bank falsified documents and misrepresented benefits it was offering to big institutional clients, including pension funds. It relates to the bank's "dark pool" trading operations, which allow clients to trade large blocks of shares while keeping prices private. Barclays has begun an internal probe into the allegations. In an email to staff, Barclays chief executive Antony Jenkins said: "I will not tolerate any circumstances in which our clients are lied to or misled and any instances I discover will be dealt with severely.” Barclays has been the subject of several investigations, fines and settlements in recent years. In May it was fined £26m by UK regulators after one of its traders was discovered attempting to fix the price of gold. In April, Barclays agreed to a $280m (£167m) settlement with the US Federal Housing and Finance Authority (FHFA), which claimed that Barclays misled US mortgage lenders Fannie Mae and Freddie Mac during the housing crisis. In 2012 it was fined £290m by UK regulators for attempting to manipulate an important lending rate, known as Libor. BBC NEWS

Energy companies under “once and for all” investigation over high profits and prices

Britain's Big Six energy companies face the threat of being broken up for ripping off customers after regulator Ofgem asked the top competition watchdog to investigate their profits and prices. The Competition and Markets Authority will begin its “once and for all” investigation “immediately”, Ofgem said, and is likely to conclude by the end of next year. The referral, which Ofgem first proposed in March, came as the regulator published new data suggesting that energy suppliers’ profit margins had increased further this month. It suggested they stood to make £101 before interest and tax from a typical bill over the next year - a 7.5pc margin and an increase from £96 last month and from £48 a year ago. The Big Six companies - British Gas, SSE, Npower, EDF, Scottish Power and E. On - have so far resisted calls to cut prices in the wake of falling wholesale costs, despite the fact they typically claim to require just a 5pc margin. TELEGRAPH

NHS cash problems will get worse next year, finance chiefs believe

The NHS's financial problems are set to worsen next year, with more hospitals ending up in the red, the health services's finance managers have warned. Growing demand for care, pressure on A&E units and the need to hire more nurses to ensure high standards of treatment are driving up costs for NHS care providers, the Healthcare Financial Management Association found. Its survey of 188 finance directors of NHS organisations found that just 12% of 129 hospital finance directors believe their trust will achieve its financial targets in 2015-16, while 44% do not. Similarly, just one in four finance directors in GP-led clinical commissisoning groups, who commission and pay for care, said they would meet their targets. Professor John Appleby, chief economist at the King's Fund thinktank, said: "This report echoes our own surveys and highlights a truth now widely acknowledged within the NHS – that it is heading towards a financial crisis in 2015-16, if not before." GUARDIAN

Tens of thousands march in London against coalition's austerity measures

An estimated 50,000 people marched from the BBC's New Broadcasting House in central London to Westminster. A spokesman for the People's Assembly, which organised the march, said the turnout was "testament to the level of anger there is at the moment". He said that Saturday's action was "just the start", with a second march planned for October in conjunction with the Trades Union Congress, as well as strike action expected next month. The crowds heard speeches at Parliament Square from People's Assembly supporters, including Green MP Caroline Lucas and journalist Owen Jones. Addressing the marchers, Jones said: "Who is really responsible for the mess this country is in? Is it the Polish fruit pickers or the Nigerian nurses? Or is it the bankers who plunged it into economic disaster – or the tax avoiders? It is selective anger." He added: "The Conservatives are using the crisis to push policies they have always supported. For example, the sell-off of the NHS. They have built a country in which most people who are in poverty are also in work." GUARDIAN

Why isn't Wonga in the dock? Fury at payday lender over bogus legal letters used to bully debtors

Britain’s biggest payday lender was yesterday named and shamed by the City watchdog, the Financial Conduct Authority. The FCA ordered it to pay more than £2.6million in compensation to 45,000 customers who received the bogus letters. But consumer groups say there is clear evidence of a criminal deception and insist the police should be brought in. While the company presents itself as the ethical face of the payday loans industry with its friendly TV ad puppets, an investigation by the FCA found extensive evidence of ‘thuggish’ behaviour. Among Wonga’s victims threatened by the fake legal team was a woman who missed repayments because she was in hospital recovering from a miscarriage. The FCA said Wonga sent letters to customers in arrears from what appeared to be two law firms, called ‘Chainey, D’Amato & Shannon’ and ‘Barker and Lowe Legal Recoveries’ – but these two companies were invented by Wonga to put pressure on customers. In some cases extra charges were added to the outstanding debt to cover the cost of sending these threatening letters. Despite the damning evidence, the watchdog added that £2.6million is the biggest compensation order it can impose on Wonga – because the wrongdoing occurred before tougher laws were implemented last year. DAILY MAIL

Homeless figures treble among private rental tenants

In the final quarter of 2009, 1,060 households in England became homeless after their private tenancies were ended, while the latest figure for the first quarter of 2014 is 3,330. It is now the single biggest cause of homelessness in England and most have been thrown out by private landlords. According to government figures, the end of a tenancy has been the most common cause of homelessness every quarter for the last two years. Landlords think it makes straightforward economic sense. Fergus Wilson owns 1,000 properties in the South East and decided to evict 200 tenants who were on housing benefit, because he thought they were at greater risk of defaulting. Low-income families are being hit by a combination of factors: cuts to welfare payments, rising rents and a shortage of social housing. And some are just falling through the gap. BBC NEWS

Reduction in GP funding puts entire NHS at risk, says GP leader

Patients are being put at risk by "brutal disinvestment" in general practice and are now often waiting two weeks for appointments, the chair of the British Medical Association's GPs' committee will warn on Wednesday. In a speech at the annual BMA conference, Chaand Nagpaul will warn that general practice is "imploding". He will say that a reduction of £450m in funding, in real terms, over the past three years, coupled with a 40m increase in annual demand for appointments over the past five years has put the future of many surgeries, and that of the entire NHS, at risk. He accused the government of having gone back on a promise to help 98 practices identified by the NHS as at risk of closure. "They said last year they would provide support and now these practices are finding they have no support," he said. "They have reneged on their promise." GUARDIAN

Living Wage Commission calls for moves to end 'national scandal'

A year-long study by the Living Wage Commission recommended a series of "low-cost" moves to tackle low pay, by building on the UK's economic recovery. The commission, chaired by Archbishop of York John Sentamu, said increasing the pay of half a million public sector workers to the Living Wage could be more than met by higher tax revenues and reduced in-work benefits from a similar number of employees in private firms. Dr Sentamu said: "Working and still living in poverty is a national scandal. For the first time, the majority of people in poverty in the UK are now in working households.”  Also on the Living Wage Commission is Dr Adam Marshall, director of policy and external affairs at the British Chambers of Commerce. He said: "The return to economic growth means that many employers are now looking again at increasing levels of pay for their employees after a tough period for business... Some businesses simply cannot afford to pay a Living Wage just yet - which is why the Commission rejected a compulsory Living Wage. The task now is to support as many employers as possible to make this transition, because paying the Living Wage can benefit employers as well as their staff." TELEGRAPH

Furious investors attack WPP and RBS over excessive bonuses and pay

Nearly 30% of shareholders at the advertising group WPP refusing to endorse a plan that allowed founder Sir Martin Sorrell to receive a £30m windfall last year. Meanwhile, the Royal Bank of Scotland chairman Sir Philip Hampton was forced to defend the bank's bonus schemes, admitting: "Pay in the financial sector, particularly banks, got out of line with other sectors and more importantly the underlying performance of the business... Ultimately taxpayers picked up some of the bills for that." But all RBS resolutions were overwhelmingly passed after the UK government voted its 63% stake in favour of the necessary resolutions. The Treasury had previously forced the state-owned bank to scrap plans to pay its bankers bonuses twice the size of their salaries, but nodded through plans to hand executives payouts of up to 100% of basic salary. GUARDIAN

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Fat Cat Football: Why German football is superior to English, on and off the field

• Germany has much lower ticket prices
• German clubs are owned by their fans
• German clubs depend on sponsorship, not high ticket prices
• German clubs think long-term

Germany has much lower ticket prices

Ticket prices are low in the Bundesliga: the average price for the cheapest tickets is just over £10. In the Premier League, fans pay upwards of £28 for the cheapest tickets.

At Bayern Munich, you can get in (albeit to stand) for £12. Contrast those prices with £30 at the cheap end in Manchester United.

For a season ticket, it averages £207 in Germany's top-flight games compared with £468 in England. These figures come from a High Pay Centre report which looks at figures up to 2011.

SOURCE: "Football mad: are we paying more and getting less?" by the High Pay Centre

Let’s compare the basics of the Premier and the Bundesliga champions. Deloittes did a comparison in 2012, from where we source the figures (SOURCE: Deloitte Football Money League 2012):

Manchester United:
Bought by the American Glazer family for £790m in 2005 in a controversial deal which loaded the club with debt. Since 2012 10% of its shares have been listed in New York.
Revenues = £331.4m, Cheapest season ticket price = £532

Bayern Munich:
Run as private company it is 82%-owned by its fans, with the sports goods firm Adidas and car company Audi holding just over 9% each.
Revenues = £290.3m, Cheapest season ticket price = £67

When Uli Hoeness, the president of Bayern Munich, was asked why the club didn't have higher ticket prices, like they do in England, he said: "We do not think the fans are like cows to be milked. Football has got to be for everybody. That's the biggest difference between us and England."

The columns below show how the demographic of a typical Premier League fan has been changing. It also shows how it differs from the average for all the UK leagues. (NOTE: The shaded columns at each end represent the average for all the leagues; A1 = higher managerial, administrative or professional class, DE = semi and unskilled manual workers, state pensioners, casual or lowest grade workers.)

SOURCE: "Football mad: are we paying more and getting less?" by the High Pay Centre

(NOTE: despite the big differences between the UK and German leagues, on the subject of fat cat tax evasion, Germany and the UK are much the same. Uli Hoeness, an icon of German club soccer, former player and medal winner in Euro 1972 and the 1974 World Cup, began a 3 year and 6 months jail sentence for tax evasion in June 2014. BBC NEWS)

German clubs are owned by their fans

In the Premier League, assorted billionaires own the top clubs (Manchester United - the Glazer family; Manchester City - Sheikh Mansour; Chelsea - Roman Abramovich).

In Germany, there is the "50 + 1" rule, whereby the association or club has to have a controlling stake so that commercial interests can't gain control. At Bayern Munich, for example, Audi and Adidas each own 9% but the rest is controlled by the members via the club.

Above all, German clubs are genuine clubs: formally constituted associations with members who elect officials. In the UK the top clubs are listed companies, or largely privately owned.

As a result, German Bundesliga clubs do not carry huge debts, like UK Premiership clubs. They rely much more on incomes generated and then invested in the game.

According to the 2012 accounts for Manchester United plc, it is registered in the Cayman Islands tax haven and listed on the New York stock exchange. United remain burdened with £420m debt from the Glazers' 2005 takeover, at approximately 8.5% interest, which cost the club £50m last year. The takeover has cost United around £550m altogether. In 2013 the club paid a £10m dividend to the owners, a £3m management fee to the Glazers, and £558,484 interest was payable to Kevin Glazer.

German clubs depend on sponsorship, not high ticket prices

In Germany the members elect the president. With lower incomes from tickets, German clubs tend to put more weight on sponsorship deals, and tend to form close associations over the long term with local firms.

Bayern gets 55% of its revenue from commercial deals with companies compared with 37% from that source for Manchester United. British clubs tend to get a bigger slice of their income from the fans.

Despite these different was of generating revenue, Manchester United’s total revenue is typically only 10% higher than Bayern’s.

German clubs think long-term

Many Premier League clubs run at a loss. Most Bundesliga clubs run at a profit.

According to Twentyfour7 Football magazine, Bundesliga clubs made a profit of £47m last season while the Premier League made a loss of £207m, even though the income to the British league was higher (£2.4bn) than to German clubs (£1.78bn).

In the Bundesliga wages are 38% of the clubs' revenue while the in Premier League it is 67%.

 

SOURCE: "Football mad: are we paying more and getting less?" by the High Pay Centre

German clubs do buy stars. Bayern Munich bought Borussia Dortmund midfielder Mario Gotze (a German) for a reported €37m (£31.5m). But they also groom youngsters. Following the German national team’s humiliating elimination at the group stage of Euro 2000, Bundesliga clubs have since spent a total of £610 million on youth academies.

It’s clear that the Premiership business model is not to dominate world football, it’s merely to dominate English football – or should I say the English football business. The top four or five Premiership clubs use their huge spending power to buy players, win games, win sponsorship and win TV rights. When it comes to English football the game is really over before it’s even begun. We know who the real winners are: everyone but the fans.

PRIMARY SOURCE: BBC NEWS

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NHS tops world healthcare table, and is second most cost-efficient. So why the cuts?!

SOURCE TELEGRAPH: Britain's NHS is the world's best health-care system, says report

The NHS has been declared the world's best healthcare system by an international panel of experts who rated its care superior to countries which spend far more on health. The same study also castigated healthcare provision in the US as the worst globally. Despite putting the most money into health, America denies care to many patients in need because they do not have health insurance and is also the poorest at saving the lives of people who fall ill, it found. Furthermore, the NHS spends the second-lowest amount on healthcare among the 11 – just £2,008 per head, less than half the £5,017 in the US. Only New Zealand, with £1,876, spent less. The UK came first out of the 11 countries in eight of the 11 measures of care the authors looked at. It got top place on measures including providing effective care, safe care, co-ordinated care and patient-centred care. The fund also rated the NHS as the best for giving access to care and for efficient use of resources. The only serious black mark against the NHS was its poor record on keeping people alive. On a composite "healthy lives" score, which includes deaths among infants and patients who would have survived had they received timely and effective healthcare, the UK came 10th. The authors say that the healthcare system cannot be solely blamed for this issue, which is strongly influenced by social and economic factors.

SOURCE GUARDIAN: NHS cash problems will get worse next year, finance chiefs believe

The NHS's financial problems are set to worsen next year, with more hospitals ending up in the red, the health services's finance managers have warned. Growing demand for care, pressure on A&E units and the need to hire more nurses to ensure high standards of treatment are driving up costs for NHS care providers, the Healthcare Financial Management Association found. Its survey of 188 finance directors of NHS organisations found that just 12% of 129 hospital finance directors believe their trust will achieve its financial targets in 2015-16, while 44% do not. Similarly, just one in four finance directors in GP-led clinical commissisoning groups, who commission and pay for care, said they would meet their targets. Professor John Appleby, chief economist at the King's Fund thinktank, said: "This report echoes our own surveys and highlights a truth now widely acknowledged within the NHS – that it is heading towards a financial crisis in 2015-16, if not before."

SOURCE BBC NEWS: Rise in NHS foundation trusts with deficit, says Monitor
A study of the 147 NHS foundation trusts in England has found the number of those in financial trouble has nearly doubled in a year from 21 to 39. Two-thirds of England's NHS hospitals are now foundation trusts. They are not directed by government so have greater freedom to decide on the way services are run. Monitor is also investigating a further eight for potential licence breaches for issues including performance failures and financial problems.

SOURCE BBC NEWS: 'Worrying shortage of senior NHS nurses'

The NHS has lost nearly 4,000 senior nursing posts since 2010, putting patient care at risk, warns the Royal College of Nursing (RCN). The NHS is in the middle of a tough drive to save £20bn by 2015. The government has claimed this can be achieved through efficiency savings and the frontline should not be harmed. But the RCN disagrees.

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Graphs at a glance: Interest rates rising? Whether they go up or down, we are the losers.

The Governor of the Bank of England has said the official Bank Rate, commonly known as the Base Rate of interest, is going to go up sooner than we think. 

The Bank of England website explains what this official rate is for:

“The Bank of England sets an interest rate at which it lends to financial institutions. This interest rate then affects the whole range of interest rates set by commercial banks, building societies and other institutions for their own savers and borrowers.”

 
In 2009, in order to assist recovery from the banking crash, this official interest rate was brought down to 0.5%. The idea being banks would be able to borrow money cheaply, and lend it out to businesses and individuals cheaply. 

Bank of England Data

Cheap loans: to encourage investment and spending, to strengthen the economy. As it happened, the banks didn't lend as intended, contributing in part to the UK economy taking a record 6 years to get back to its pre-crisis peak.

So should we be afraid of the Bank of England raising its official rate? None of us actually have mortgages with the Bank of England, so why should we care? The high street banks don’t actually HAVE to change interest rates they charge us just because the Bank of England changes its official rate.

The question is “will they or won’t they” follow the Bank of England? Recent history, shown in Bank of England statistics, show that the banks both will and won’t.

1) They Will: 

The banks DID follow the Official Rate when it came to paying interest to us on our savings. For some reason the Bank of England statistics for interest paid on our savings stop from January 2013. Perhaps because savings rates became too small to measure?:

Bank of England Data

2) They Won’t: 

The banks DID NOT follow the Official Rate when it came to taking interest away from us on our borrowing. As the graph shows, when the official rate dropped to 0.5% in March 2009 the high street lending rates remained oblivious. Bank of England statistics show that in spite of the fall of the official rate in 2009, banks actually increased the interest rates for Credit Card and authorised Overdrafts.

Bank of England Data

So, should we be afraid?

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Another tragic performance at a World Cup. Is it our overpaid players? No grassroots investment?

Chris and KJ look to the German model...

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Fat Cat Football: Why German football is superior to British, on and off the field

Runaway Premier League football wages are damaging the national game

Who needs fat cat pay? The Germans don't. See the comparison with the UK

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 19th June)

NHS is the world's best healthcare system, says international panel of experts

The NHS has been declared the world's best healthcare system by an international panel of experts who rated its care superior to countries which spend far more on health. The same study also castigated healthcare provision in the US as the worst globally. Despite putting the most money into health, America denies care to many patients in need because they do not have health insurance and is also the poorest at saving the lives of people who fall ill, it found. Furthermore, the NHS spends the second-lowest amount on healthcare among the 11 – just £2,008 per head, less than half the £5,017 in the US. Only New Zealand, with £1,876, spent less. The UK came first out of the 11 countries in eight of the 11 measures of care the authors looked at. It got top place on measures including providing effective care, safe care, co-ordinated care and patient-centred care. The fund also rated the NHS as the best for giving access to care and for efficient use of resources. The only serious black mark against the NHS was its poor record on keeping people alive. On a composite "healthy lives" score, which includes deaths among infants and patients who would have survived had they received timely and effective healthcare, the UK came 10th. The authors say that the healthcare system cannot be solely blamed for this issue, which is strongly influenced by social and economic factors. GUARDIAN

Rabbit-hutch Britain: Growing health concerns as UK sets record for smallest properties in Europe

Britain is in the grip of an invisible housing squeeze with millions of people living in homes that are too small for them, according to new research which reveals that more than half of all dwellings are failing to meet minimum modern standards on size. The poorest households are being hit hardest, with estimates suggesting that four-fifths of those affected by the Coalition’s “bedroom tax” are already forced to contend with a shortage of space. The findings will put pressure on the Government, which announced it was to develop a national space standard – although this will only be enforced where it does not impinge on development. Critics argue that the UK already has the smallest properties in Europe following the end of national guidelines in 1980. The average floor space for a dwelling in the UK as a whole is currently 85 sq metres, whilst new-builds average only 76 sq metres – putting Britain at the bottom of a league table of 15 countries including Ireland, Portugal and Italy. When analysed by floor space instead of the number of rooms, 55 per cent of all homes fail to meet the industry-wide standards. Overcrowding causes health problems including depression, insomnia and asthma. INDEPENDENT

Credit Suisse and Yorkshire BS fined for selling financial product with “close to zero” chance of success

Credit Suisse designed a product, called "Cliquet", to provide a minimum return, with the apparent potential for getting back significantly more if the FTSE 100 performed consistently well. Both the banks had promoted the products' potential maximum return, which investors had almost no chance of getting, the Financial Conductor Authority (FCA) said. The FCA said that the probability of getting back a minimum return was between 40% and 50%, while the chance of a maximum return was "close to 0%". The product was sold to 83,777 people, typically people with limited investment experience. Tracey McDermott, FCA's director of enforcement and financial crime, said: "CSI [Credit Suisse] and YBS knew that the chances of receiving the maximum return were close to zero but they nevertheless highlighted this as a key promotional feature of the product. This was unacceptable." BBC NEWS

A third of UK households 'in poverty'? Research claims 18million struggle to afford decent housing, food and heating

Researchers found that the numbers ‘in poverty’ had increased sharply over the past 30 years from 14 per cent to 33 per cent of households despite the size of the economy doubling. The majority of children who suffer from multiple deprivations live with one or two siblings, with both parents, have at least one employed parent, and are white and live in England. 5.5 million adults go without essential clothing, 2.5 million children live in damp homes and 1.5 million children live in households that cannot afford to heat their home. The report is by the Poverty and Social Exclusion report funded by the Economic and Social Research Council. Anti-poverty campaigners claim that full-time work is not always sufficient to escape poverty. Low wages and working conditions in many parts of the UK mean that one in six adults in paid work is suffering from a low income and cannot afford basic necessities. Whist wage growth remains low, full-time work is not sufficient to escape from poverty for a 'large number of people', with almost half the employed poor working 40 hours a week or more. DAILY MAIL

UK Uncut protesters blockade Vodafone stores across country

Anti-tax avoidance protesters UK Uncut held a series of demonstrations at Vodafone shops across the country on Saturday, claiming that they forced at least four to close. The demonstrators warned that more actions were planned in the coming weeks, with the Vodafone's AGM in late July thought to be a prime target. Groups targeted 10 Vodafone stores across the country, including the flagship Oxford Street shop in central London. Protesters descended on Vodafone outlets in Bristol, Manchester and Glasgow, as well as in Cornwall and Grimsby. They also targeted shops in Newbury, Norwich, Peterborough and St Albans on Saturday. They were protesting the tax avoidance schemes employed by Vodafone, a company that admitted in December 2013 that it has paid "little or no corporation tax" in the UK. Vodafone said it had closed only two stores in response to the protests. GUARDIAN

Half a million people now waiting for a passport after backlog DOUBLED in just three months as ministers 'lost control'

The backlog of passport applications threatening to ruin thousands of family holidays this summer almost doubled in just three months this year. Passport Office chief Paul Pugh admitted 480,000 people are now waiting for their travel documents - some 200,000 higher than last year. Mr Pugh, who revealed he earns £104,000 a year, blamed a 'substantially higher intake' of applications. But unions told MPs the figure was even higher. By June 8 the number of people waiting for their passport had hit 493,289, union chief Mike Jones told the Home Affairs Select Committee. Just 12 weeks earlier, the figure stood at 289,892. Jones said he wanted the 550 jobs cut since 2010 reinstated and a 'guarantee' of no more privatisation. He added: 'We've got a crisis caused by a lack of jobs.' In response to the crisis, the Passport Office has increased the number of examiners and call centre staff by a further 200 on top of the 1,000 staff already redeployed to deal with a surge in applications running at a 12-year high. Emergency staff earn up £70 an hour. Around 100 Home Office staff based in the North have been asked to move to the Liverpool Passport Office for up to two months. This is on top of the 250 backroom staff at the Passport Office which have already been redeployed to the front line. DAILY MAIL

Doctors urge WHO to rein in e-cigarettes market

More than 100 leading public health doctors and specialists from around the world have signed a letter to the director general of the World Health Organisation, Margaret Chan, calling for new controls on e-cigarettes and warning that they may be a stalking horse for the tobacco industry. The experts want the WHO to bring e-cigarettes under the same tight controls as tobacco products, with bans on advertising and promotion. They say there is insufficient evidence so far that e-cigarettes are harmless and can help people to quit smoking. Their biggest concern is that, if advertising and marketing are allowed, smoking will be "renormalised", undermining public smoking bans and undoing decades of effort to marginalise cigarettes and persuade people of the harm they do. GUARDIAN

Which? reveals record energy company complaints Complaints to the big six reach all time high

The latest figures on how many complaints the energy providers receive show that complaints are on the rise again. Npower is still worst - it received 450,000 complaints in the first three months of 2014 alone. A staggering 1.7 million complaints have been made to the major six energy providers in the first three months of 2014. This is the highest quarterly number of complaints received by the energy companies since consistent recording began at the end of 2012. WHICH

Victory for Ovo Energy customers as watchdog backtracks on decision to stop the supplier paying interest on bill overpayments

More than 13million households are in credit with their energy suppliers, according to price comparison website uSwitch. One in five is owed more than £100. But only Ovo and rival Scottish Power offer some kind of payment to customers whose money they hold on to. Last week, Ofgem caused outrage when it tried to ban the firm from paying 3 per cent interest on their balance to customers who have built up a credit. The bonus has made households more than £1million since 2010. It claimed the interest payment was too confusing and breaks its new rules on the number of discounts suppliers can offer. But in a U-turn the regulator now says it will make an exception and allow Ovo Energy to continue making this payment. This is a huge perk. Scottish Power currently rewards customers with up to £12 on overpaid balances between £133 and £500. DAILY MAIL

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Cuts mean prisoners kill themselves or opt for punishment blocks to escape overcrowding, says Chief Inspector of Prisons

SOURCE GUARDIAN: Prisons face overcrowding due to policy failure, says watchdog   

The chief inspector of prisons, Nick Hardwick, issued a stark warning that cuts had left the system so stretched that more inmates were killing themselves or getting deliberately sent to punishment blocks to escape crowded conditions. The justice secretary, Chris Grayling, rejected the criticisms, insisting the number of assaults and cases of self harm were falling and that 2,000 extra prison places were being built. He conceded the government had been taken surprised by a recent surge in demand for cell space, blaming a spate of historic sex abuse cases. But he defended his decision to order dozens of already full and overcrowded prisons to take 440 extra offenders between them as a sensible precaution to deal with the unanticipated squeeze. Shadow justice secretary, Sadiq Khan, blamed the closure of nearly 20 prisons for the decision to ask private companies to provide an extra 412 places at a cost of millions of pounds. Jeremy Wright, minister for prisons and rehabilitation, declined to disclose the costs of the prison places on the grounds that the information is "commercially sensitive".

SOURCE BBC NEWS:Full jails told to take in more prisoners

Forty prisons in England and Wales have been told to raise their "operational capacity" in the next two months, according to documents seen by the BBC. All but six of these are running at full capacity or are already overcrowded. The order to take in more prisoners is very embarrassing for the Ministry of Justice, which has closed 16 jails in the past four years. The Prison Officers Association described the development as a "fiasco". It said emergency measures were also being put in place to recruit staff after thousands of prison officers took voluntary redundancy. Retired officers and those who have recently left the service are being offered short-term contracts to re-join until the end of the year.

OUR RELATED STORIES:

See the effect of badly planned cost cutting in the NHS, Military, Home Office, DWP etc. Britain is choking on a diet of austerity

Case study: How Barnet Council outsources so someone else will do the dirty work of cutting the jobs, wages, and services for them

Outsourcing: Capita’s low-cost inadequate court interpreters are good news for the guilty and bad news for the innocent

1 in 20 homicide cases now fail solely due to court budget cuts. Read the facts

Graphs at a glance: See how local authority cuts have hit the poorest areas first and hardest

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

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

How many, Cameron?! Only 160 out of 4.8m get more than £50k housing benefit. See all the exaggerated stats on this, disability allowances and jobs

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See the effect of badly planned cost cutting in the NHS, Military, Home Office, DWP etc. Britain is choking on a diet of austerity

Remember those ‘diet breads’: 25% fewer calories per slice? Achieved by 25% smaller slices? Outsourcing companies have used the same ruse to win vast government contracts. Promising great savings (slimming down), achieved by employing fewer and less qualified people and paying them less (less bread). 

Diet breads charged you more to give you less.You risk your health if you don’t understand this. The Tories didn't understand (or perhaps more shamefully, they did). Their fetish for slimming down the Public Sector is proving to be more than unhealthy for Britain. Cutting costs has its price: unqualified teachers in “free schools”; unqualified translators and underqualified barristers in the legal aid system; paramedics doing what doctors used to do; reservists doing what the professional army used to do. And there is more.

The Telegraph reported the chief executive of the Royal College of Nurses complaining of hospitals being starved of staff:

“Understaffing remains a real issue across the NHS, and we know that many trusts are down to the bone in terms of the number of frontline nursing staff they have due to cutting posts to save money....Unsafe staffing levels have been implicated in a number of high-profile investigations into patient safety.”

According to the National Audit Office the Ministry of Defence (MoD) has managed to starve the armed forces by failing to find suitable reserves while continuing to sack the experienced professionals. 

“Under Army 2020, by December 2018 the number of trained regular soldiers in the Army needs to be reduced by around 20,000 (down from 102,000); and, by the end of 2018-19, the number of trained reserve soldiers needs to be increased by at least 11,000 (up from around 19,000)….. However, the Department did not test whether it was feasible to recruit and train the required number of reserves by 2018-19."

The Ministry of Justice (MoJ) is starving the justice system. A report by the Bureau of Investigation found:

“budget cuts had led to the CPS losing 23% of its barristers (202), 22% of its solicitors (518) and 27% (296) of its higher court advocates.

That loss in staff correlated with an increase in the rate at which homicide trials failed because the CPS provided insufficient or no evidence after a not guilty plea. This was equivalent to one in twenty homicide cases and represented a rise of 50% compared with 2010. The rate at which the CPS offers ‘no evidence’ had also risen for burglary, robbery, fraud and forgery, and criminal damage trials.”

Problems ran through the courts into the jails. In June 2014 the BBC reported:

“The Ministry of Justice has ordered dozens of already full jails to take more prisoners because the jail population is increasing faster than expected, it has emerged…. Some facilities are already at 150-160% capacity”

"the order to take in more prisoners is very embarrassing for the Ministry of Justice, which has closed 16 jails in the past four years."

On the same day, the BBC also reportedthat ninety prisoners were on the run from Ford Open Prison in West Sussex. Nick Gibb, Conservative MP for West Sussex, said:

“It's becoming a pattern. It says to me the wrong people are being sent to Ford Open Prison…. I sense that because of the constraints on capacity in the prison service that mistakes are being made in that assessment process,"

2014 started with catastrophic flooding in large parts of England. After early denials from David Cameron, DEFRA published figures showing how spending on flood defences had been cut both in real and nominal terms since the 2010 election.

The Department of Work and Pensions (DWP) finally had the towel thrown in on its ‘Universal Credit’ money-saving idea. Having spent £140 million, the government’s Major Projects Authority (MPA)  “reset” the project back to the drawing board. 

Which is about par for the course from the DWP where the backlog processing benefits by the outsourcing company ATOS, and Personal Independence Payments (PIP) by the outsourcing company Capita, has hit hundreds of thousands of people. The BBC reported:

PIP has already been criticised by the National Audit Office, which said in February [2014] that a backlog of 92,000 claims had built up

And

The DWP said [in June 2014] the total backlog stood at 712,000 people. Of these, 394,000 are new claimants for ESA and 234,000 are existing ESA recipients whose reassessments as to whether they are still entitled to the benefit have been delayed.

Of course, there is also the passport fiasco engineered by the Home Office’s cost cutting. In Prime Minister’s Questions, after the usual initial denials, Cameron owned up to a 30,000 backlog:

Dyed-in-the-wool Tories know there is at least one person with a plan to deal with the consequences of all this Austerity. Sporting the reassuring dynamism and blonde curls of a Flash Gordon, Boris “Splash” Johnson has bought some second hand (i.e. austerely cheap) water cannon from the Germans. For why? The Association of Chief Police Officers (ACPO) have given their opinion in no uncertain terms in a letter supporting the purchase:

“it would be fair to assume that the ongoing and potential future austerity measures are likely to lead to continued protest... In addition, the social and economic factors that are currently being experienced have the potential, when combined with a significant (and often spontaneous) “trigger” event, to lead to the outbreak of significant disturbances.”

Darker green is the most probable outcome.

What would be the cause of the unrest? According to the Office of National Statistics, UK GDP has grown by an average 2.6% per year in real terms (inflation taken into account) since 1948. Bank of England projections indicate that from 2013 we are returning to this long term growth trend.

Booms and busts come and go, as economists well know. The Bank of England's comment is:

“Since 1973, there has been one instance of contracting annual output in every decade. These occurred in 1974/75, 1980/81, 1991 and 2008/09.”

The dismal truth is the temporary economic bust of 2008 is being used as cover to permanently reduce the share of national wealth that is spent on the nation. And all the above doesn't even mention permanent cuts to pensions, welfare, job security and more, all done in the name of "austerity". 

Somethings to remember as the 2015 General Election approaches.

 

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