UK rendition to the US? Not always a bad thing!

Can KJ get Fee to compromise on her principles, just a little...

Barclays facing record $470m fine in US for rigging energy market
Barclays suffered another huge blow to its reputation yesterday as America's main energy regulator said it wants to fine the bank a record $470m (£292m) for rigging the Californian electricity market. INDEPENDENT

HSBC warns it could be fined more than £1bn in the US and face criminal prosecutions over illegal money-laundering
The bank said that it had yet to reach an agreement with US regulators on the ultimate size of the fines following accusations it had handled money that derived from Mexican drug cartels and rogue nations such as Iran and Sudan. TELEGRAPH

OUR RELATED STORIES:

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

What does banking contribute to UK Plc? 7 myths exposed, and why we must rein them in

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 8th November)

All in this together? Boomtime in the boardroom as top bosses enjoy 27% pay rises
The average director in Britain’s top 100 companies saw their total earnings jump by 27%, despite pay and bonuses being cut. The report found top bosses are still coining it in thanks to share windfalls from previous years. MIRROR

Almost one in three MPs aren't paying staff a Living Wage

According to the Commons watchdog, 181 of 650 MPs are failing to pay all their staff the minimum "living wage" rate which was raised this week to £7.45/hour (£8.55 in London). MIRROR

("At least I gave my interns free laptops," said Denis McShane, sacked this month for falsifying his MP's expense claims for such things as, errr... free laptops.)

Pension pots to plunge under new rules
Millions of savers will see the predicted value of their retirement pots plunge by almost 40% after the financial regulator, the FSA, ordered pension firms to cut their growth forecasts due to the global economic slowdown. The FSA said unrealistically high growth forecasts gave savers the “false impression that they are likely to get huge returns”. TELEGRAPH 
(“But that’s the only way we get anyone to buy these pensions,” said roomfuls of unhappy pension salesmen.)

Barclays facing record $470m fine in US for rigging energy market
Barclays suffered another huge blow to its reputation yesterday as America's main energy regulator said it wants to fine the bank a record $470m (£292m) for rigging the Californian electricity market. INDEPENDENT
(All of a sudden the UK's human rights-breaking extradition agreement with the US looks worth preserving for a little while longer...)

HSBC warns it could be fined more than £1bn in the US and face criminal prosecutions over illegal money-laundering

The bank said that it had yet to reach an agreement with US regulators on the ultimate size of the fines following accusations it had handled money that derived from Mexican drug cartels and rogue nations such as Iran and Sudan. TELEGRAPH

(Ditto.)


HMRC wants divorcees to turn in their tax evading ex-es

The taxman is turning to disgruntled divorcees and former employees for information on tax evaders, as pressure mounts from the Treasury for an increase in tax revenue. Last year the Revenue paid £373,780 to informers including former spouses and business partners. DAILY MAIL
("That's what I call good grounds for divorce," said millions of unromantic yet hard-pressed and honest taxpayers.)

Workers' rights on health and safety to be scaled down
Injured workers may be forced to prove that their employer was directly to blame for their accident before they are eligible for compensation. Figures released this week by the Health and Safety Executive show that last year 173 people died as a result of workplace accidents and 22,433 were seriously injured. The government says it will cut unnecessary red tape. INDEPENDENT
(Don't cut that tape!!!... ...now look what you've done.)

Foreign firms could owe UK £11bn in unpaid taxes
The £11bn represents 44% of the total £25bn wrongly withheld by all companies. Foreign companies named include Starbucks, Amazon, Facebook and Google. There are concerns that giant corporations use accounting strategies to divert profits earned in Britain to their parent companies or to lower tax jurisdictions, via royalty and service payments, or by so-called transfer pricing. TELEGRAPH

More QE money printing may not just be ineffective but "counterproductive”
A former senior economist at the Bank of England has admitted that QE caused pension scheme deficits to balloon, which forced companies to plough money into the schemes that might otherwise have been used to invest in jobs and growth. Pensioners have also seen their incomes fall as a result of low annuity rates, impacting spending. TELEGRAPH

Read More

The campaign for a living wage gains momentum

Both Cameron and Miliband have voiced support in the past. All it needs is the political will...

Labour calls for £7.20 an hour 'living wage' TELEGRAPH
Almost five million British workers are paid less than the living wage
The research by KPMG found that 4.82m workers survive on less than a living wage. The government has resisted campaigns to increase the current minimum wage of £6.19 to the higher living wage levels, fearing that it would hit employment figures. All three main party leaders expressed support for the Living Wage campaign before the last election but have done nothing about it since then. GUARDIAN

RELATED ARTICLES:

Cutting benefits will push the work-shy into employment? Actually benefits subsidise the low wages of millions of working Britons

Here's how the poor end up being charged £1,000+ more for the same basic goods: all bills, food, etc.

Read More

Liebrary - Does giving the 1% greater rewards benefit everyone? Compare data for Britain and France to see this is not true

"The price of this financial crisis is being borne by people who absolutely did not cause it…..Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has."
Mervyn King, Governor of the Bank of England, March 2011.

Post Credit-Crisis austerity has been about taking less from the wealthy, and taking more from everyone else. Income tax cuts for the rich; wage freezes, pensions and benefits cuts for the rest. 

Office of National Statistics Living Costs and Food Survey

Consumption taxes, like VAT, have gone up hitting ordinary Britons harder than the wealthy. Why harder? Because ordinary people spend all they earn to pay their bills, while the rich have surplus income to save. You don't pay consumption tax on what you don't consume. In this post, we reveal data from the Paris School of Economics that show how the 90% had their share of the boom stolen. The same 90% who are now made to endure austerity to pay for the bust.

The business and political elites tell us we must celebrate massive pay and bonuses for the elite for our own sakes. They tell us we must cut top rate income tax, we must not impose a wealth tax, we must allow tax avoidance loopholes for individuals and companies. All because if we did not it would hurt all us ordinary Britons. 

They reassure us that it is for our sake that energy companies hike prices, for our comfort that pension companies take up to 50% of our savings in fees, and it is to give us free banking that banks charge us extra. Which coincidentally generate the profits to pay the massive bonuses and pay for the elite we should be celebrating. We are told we ordinary Britons would be worse off if these were not so.

But is this actually true? The lie is exposed by comparing how the income shares of the elites in France and in Britain have changed. 

France and Britain have in recent history done about the same in terms of GDP (see graph at bottom of this post). Using Purchasing Power Parity (PPP), which shows the actual buying power of their money, in 2011 British GDP per person was US$36,500 while the French was US$35,200 per person. A difference in sterling of £2.50 a day. 

Britain and France: two nations, both alike in dignity as well as GDP. But between 1981 and 2006 British elites sucked up income ten times faster than the French elite. And the lower 90% of Britons saw their share drop five times faster than the equivalent group of Frenchman.

• Top 0.1%: in France share increased by 40%; in Britain share increased by 362%
• Top 1% : in France share increased by 18%; in Britain share increased by 222%
• Bottom 90%: in France share dropped by 3%; in Britain share dropped by 16%

The assertion by the rich that giving more to the rich makes us all richer is a lie. France managed equivalent growth in national GDP without the soaring inequality that has happened in the UK. No need for many more words, just see the graphs:

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

No, I don't know why there is a gap in the dataset for the UK between 1986 and 1992

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

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

And here are the graphs for Gross Domestic Product showing, in spite of what the moneyed elite tell us, the galloping inequality in Britain has left the nation no better off than the more egalitarian French.

For clarity,the drop in share has resulted in a stagnation of income of the bottom 90%.

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

So, next time someone tells you that great inequality is good for everyone send them a link to this post.

Read More

The Occupy protesters were right, says Bank of England

...And Chris's banker chum is man enough to admit it...

TELEGRAPH - The anti-capitalist protesters who occupied St Paul’s Cathedral were both morally and intellectually right in its attack on the international financial system, said senior Bank of England official Andrew Haldane. The movement’s “tent city” occupied the grounds of St Paul’s for more than three months. The protest ended after the Corporation of London, home to the UK’s major banks, had them evicted, claiming that the protesters were despoiling the cathedral’s grounds.

SEE OUR RELATED STORIES:

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

Riposte: What does banking contribute to UK Plc? 7 myths exposed, and why we must rein them in

Read More

Liebrary: Cutting benefits will push the work-shy into employment? Actually benefits subsidise the low wages of millions of working Britons.

More evidence that benefits subsidise business comes from the report by Queen Mary University of London.

The London Living Wage is calculated by the Greater London Authority's "Living Wage Unit", set up by Boris Johnson as Mayor of London in 2005. Boris Johnson stated in the 2011 report:

"The functioning of our great city relies on the work of many who carry out its essential functions on a daily basis – from office cleaners to care-workers in social services. It is right that their skills and commitment to London’s success are recognised, and one of the most fundamental ways of doing this is to ensure that all Londoners are paid properly.  That means receiving at least the ‘London Living Wage’, which is designed to provide a minimum acceptable quality of life."

http://www.geog.qmul.ac.uk/livingwage/

This same GLA report set the London Living Wage at £8.30 per hour. The gap between the 2011 National Minimum Wage of £6.08 per hour and the London Living Wage in 2011 is £2.22. 

However, the London Living Wage assumes that on top of the £8.30 per hour the worker is also receiving benefits. According to the Queen Mary University report, without benefits the worker would need £4.32 per hour more - a 71% increase.

The subsidy benefits provide to businesses paying low wages is not restricted to London. Including Living Wage calculations for workers outside London, a report by the Resolution Foundation found the following proportions of workers earning less than a living wage in these sectors:

• Distribution, Hotels & Restaurants: 55% of workers (2,576,000 people)
• Manufacturing: 21% of workers (612,000 people)
• Transport & Communications: 19% of workers (292,000 people)
• Banking, Finance, Insurance & Real Estate: 16% of workers (646,000 people)
• Construction: 15% of workers (180,000 people)

Workers earning less than a living wage across the country:

• 32% in the North East (375,000 people)
• 31% in Yorkshire and Humber (714,000 people)
• 31% in Wales (344,000 people)
• 30% in the West Midlands (617,000 people)
• 28% in the East Midlands (552,000 people)
• 27% in Scotland (623,000 people)
• 27% in the South West (583,000 people)
• 25% in the North West (683,000 people)
• 24% in the East of England (593,000 people)
• 23% in the South East (843,000 people)
• 20% in London (581,000 people)

(Source: ResolutionFoundation analysis of pooled four quarter Labour Force Survey data 2010)

Read More

Liebrary: Cutting benefits will push the work-shy into employment? Actually benefits subsidise the low wages of millions of working Britons.

More evidence that benefits subsidise business comes from the report by Queen Mary University.

The London Living Wage is calculated by the Greater London Authority's "Living Wage Unit", set up by Boris Johnson as Mayor of London in 2005. Boris Johnson stated in the 2011 report:

"The functioning of our great city relies on the work of many who carry out its essential functions on a daily basis – from office cleaners to care-workers in social services. It is right that their skills and commitment to London’s success are recognised, and one of the most fundamental ways of doing this is to ensure that all Londoners are paid properly.  That means receiving at least the ‘London Living Wage’, which is designed to provide a minimum acceptable quality of life."

http://www.geog.qmul.ac.uk/livingwage/

This same GLA report set the London Living Wage at £8.30 per hour. The gap between the 2011 National Minimum Wage of £6.08 per hour and the London Living Wage in 2011 is £2.22. 

However, the London Living Wage assumes that on top of the £8.30 per hour the worker is also receiving benefits. According to the Queen Mary University report, without benefits the worker would need £4.32 per hour more - a 71% increase.

The subsidy benefits provide to businesses paying low wages is not restricted to London. Including Living Wage calculations for workers outside London, a report by the Resolution Foundation found the following proportions of workers earning less than a living wage in these sectors:

• Distribution, Hotels & Restaurants: 55% of workers (2,576,000 people)
• Manufacturing: 21% of workers (612,000 people)
• Transport & Communications: 19% of workers (292,000 people)
• Banking, Finance, Insurance & Real Estate: 16% of workers (646,000 people)
• Construction: 15% of workers (180,000 people)

Workers earning less than a living wage across the country:

• 32% in the North East (375,000 people)
• 31% in Yorkshire and Humber (714,000 people)
• 31% in Wales (344,000 people)
• 30% in the West Midlands (617,000 people)
• 28% in the East Midlands (552,000 people)
• 27% in Scotland (623,000 people)
• 27% in the South West (583,000 people)
• 25% in the North West (683,000 people)
• 24% in the East of England (593,000 people)
• 23% in the South East (843,000 people)
• 20% in London (581,000 people)

(Source: ResolutionFoundation analysis of pooled four quarter Labour Force Survey data 2010)

Read More

Rip-off News round-up. Our pick of the last week's media (Thu 1st November)

Occupy protesters were right, says Bank of England official

The anti-capitalist protesters who occupied St Paul’s Cathedral were both morally and intellectually right in its attack on the international financial system, said senior Bank of England official Andrew Haldane. The movement’s “tent city” occupied the grounds of St Paul’s for more than three months. The protest ended after the Corporation of London, home to the UK’s major banks, had them evicted, claiming that the protesters were despoiling the cathedral’s grounds. TELEGRAPH

(“Those dummies! Had they despoiled the whole world and thrown it into a global recession, we’d have given them one of our big fancy buildings to live in,” said the Corporation of London.) 

Trainee teachers will face tougher entry tests
Education Secretary Michael Gove wants more rigorous tests to select trainees, in order to raise standards. But the National Union of Teachers criticised Gove for raising entry requirements while at the same time advocating that academy schools should be free to employ unqualified teachers. The proposed tests will assess the candidates' ability to solve problems, recognise patterns, think laterally, evaluate and analyse issues. BBC NEWS

(“If we’d had this sort of testing to screen every Education Minister over the last 30 years, we wouldn’t be in the mess we’re in now,” said every teacher in the land.)

London "tax dodge" inquiries by foreign governments rise by 18%

Overseas governments have intensified their pursuit of their own tax dodgers who hide in the UK. The global crackdown on tax evasion is picking up pace. In recent years legislation designed to fight terrorism and money-laundering has made it easier for countries to share information on tax affairs. Pinsent Masons, the law firm, said "The expertise of London in wealth management makes it a stable 'haven' for individuals looking to protect their assets from political or economic instability overseas." GUARDIAN

( “Political or economic instability”?? Surely “the taxes their honest hard working fellow citizens pay all the time.”)

Bob Diamond should explain Libor role in court, says judge

Guardian Care Homes (GCH) claims that Barclays mis-sold it a complex interest rate swap product based on Libor (the key interbank interest rate). Earlier this year major banks were caught rigging Libor rates, which affect transactions worth trillions of dollars worldwide. The landmark legal case will also determine which other firms can claim banks mistreated them. The judge warned Barclays against any attempt to undermine the trial, in which the bank will have to disclose 1.2m Libor-related emails. GUARDIAN
("Oops, sorry. I just deleted them all," said a Barclays executive.)

Almost five million British workers are paid less than the living wage
The research by KPMG found that 4.82m workers survive on less than a living wage, currently £8.30 an hour in London and £7.20 in the rest of the country. The government has resisted campaigns to increase the current minimum wage of £6.19 to living wage levels, fearing that it would hit employment figures. All three main party leaders expressed support for the Living Wage campaign before the last election but have done nothing about it since then. GUARDIAN
(“Sorry, it slipped our mind. We’ll get a few of our unpaid interns on to it straight away,” said the Tory, Labour and LibDem HQs one after the other.)

Banks blamed for rise of unscrupulous PPI claims management firms
Banks were caught mis-selling useless Payment Protection Insurance, and ordered to refund over £10bn. The process of getting a refund is so simple that applying to the bank directly is sufficient. However, banks have turned down so many genuine claims that people have mistakenly believed that using a claims management firm (which takes a 25% cut) will make a difference, which it won't. The chief financial ombudsman has concluded that banks not investigating PPI claims properly has therefore played into hands of the unscrupulous claims management firms. DAILY MAIL
("Out of thin air we've created thousands of new jobs and a whole new industry that takes a 25% cut for doing nothing at all. It's what we do best!" said our banking insider.)

Read More

By the next election one million working people will depend on housing benefit to afford rent

Work and Pensions Secretary Iain Duncan Smith has done the sums...

National Housing Federation says by next election one million earners will be dependent on welfare to afford rent. Government says "under our reforms those on housing benefit can still afford up to a third of homes on the local rental market." - GUARDIAN

SEE OUR RELATED STORIES:
Is the top rate tax really paid by the wealthiest? In fact, the low paid have the highest marginal tax rate at 95%

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

Read More

Liebrary: Are energy companies really forced to raise prices due to high wholesale prices?

We notice that energy company spokesmen defend price hikes on television, radio and in print by claiming to buy all their energy on the wholesale market. (You can also read our more detailed post on this from 2011).

The fact is the retail energy companies, who bill domestic consumers, buy their wholesale gas and electricity from...you guessed it...themselves. The generating companies, who take the coal and gas from the Earth and generate the wholesale electricity, are the retailers’ own conjoined twins. Each of the ‘big six’ are now able to supply virtually all their own needs. The graph below from OFGEM shows above the zero line how much energy the retail companies' generation twin can generate, and below the zero line how much energy the companies sell to the likes of you and me and the businesses that employ us. All six are more or less in balance – they can supply their own demands. [In the graph, RWE is the owner of nPower, SP is Scottish Power]

Since 2004 the energy industry has simply moved its profits from the retail side of the business to the wholesale generation business. This can be seen from the soaring OFGEM graph below showing the Value Chain Profitability. Profits from generation were small until 2004, after which they boomed as did overall profits:

Energy companies' wholesale arms sell at a high price generating profits. Their  retail arms buy wholesale energy at a high price, allowing their retail arms to blame wholesale prices for them hiking our bills. This applies whether they buy from themselves, or they buy (i.e. swap) wholesale energy at a high price with one another. This allows them to state with a straight face that they are making tiny margins on their retail business. It keeps their wholesale profits hidden - even from the spineless regulator OFGEM.

Do you think no civilised executive would condemn fellow Britons to fuel poverty, with many thousands dying in the cold? The Tory MP, Colonel Bob Stewart, said in parliament in 2011:

"I am shocked that between 20,000 and 25,000 pensioners a year in this country are said to die from hypothermia. In my constituency, I am told, an average of 30 old people die of cold each winter, which is shocking."

Could anybody be so nasty? Remember how many decades tobacco companies sent out executives who looked you straight in the eye and said smoking did not cause cancer. Having convinced lobbyists, lawyers and untold millions to believe and even support their fibs, the tobacco industry eventually came clean. Energy companies, for now, are sticking to their guns.

Read More