The Defence Secretary Gavin Williamson yesterday outlined spending plans for defence post Brexit, despite his department’s £7bn budget shortfall.Continue reading
Researchers at the London School of Economics have found that rent sharing among 300 London-based companies, including G4S and Tesco, has decreased significantly since 1983, which has led to an increased wage gaps between employees at the bottom and top percentiles of the salary rates for each company.
Rent sharing refers to the relative rises in employee pay at the bottom and top of a company compared to the companies net increases in profits.
The study has also highlighted that companies that saw higher increases in profits, due to a larger monopolisation of their respective markets, actually saw lower rent-sharing and higher income inequalities as profits rose.
in the 1980s, companies that experienced higher profits would on average pay their employees 50% higher wages directly due to rent-sharing, when compared to companies that didn’t experience an increased profit. However, at present day, this difference is now aw low as 10% on average, which means that many companies are less likely to share increased profits with workers on the lower end of the business hierarchy.
While the extent of inequalities driving the most profitable businesses in Britain appears shocking, it may not come as much of a surprise for many, as income inequality is a national scandal that the political turmoil of Brexit has helped to shroud over recent months. A recent survey of European countries found that the UK had the second highest poverty rates of country in Europe, beaten only by Romania.
The lastest World Inequality Report for 2018 also showed that in almost all regions of the world, the top 1% of earners globally have taken twice as much of the global growth for themselves as have the poorest 50%
UK economic growth has reportedly slowed by 2.3% since 2016, when the Brexit referendum was running, leading to a decrease in public spending budgets of around £17 billion this year in a new update published by the Centre for European Reform, a Thinktank specialising in European Economic and Political research.
The hit to public spending equals around £320 million a week to the taxpayer, however this estimate is slightly lower than the estimated cost of Brexit to previous estimates of 2.5% of the British economy.
The slight recalculations of the estimated costs were due to UK growth outperforming other countries that matched Britain economically that were used to gauge UK economic performance following the Brexit vote.
The UK economy grew by 0.6% in the final months of 2018, the fastest it has grown since 2016 when the economy was recovering from the initial hits suffered from the immediate market backlash from the results of the referendum, this was coupled with other countries being measured against the UK by the thinktank such as Germany seeing an unusually difficult winter, where the German economy shrank by 0.3%.
The increased uncertainty may be due to UK companies acting more conservative in their spending and growth investment in preparation for the possible economic impacts of the UK fully exiting the EU, and increased inflation, with the UK largely missing out on a general increase in growth felt across Western economies between early 2017 and early 2018.
The data constructs a simulated economy of a “doppleganger” UK made up from the economic information of other Western economies, including the United States, Germany, Luxembourg, Iceland, and Greece, and uses a proportion of each country’s economic performance based on how similar it is to the UK in terms of economic structure and its pre-referendum growth rates. In combination with each other, they very closely match the UK’s pre-referendum economic performance. This “doppleganger” UK is then simulated in the post-referendum market environment and compared to the actual growth rates of the UK economy.
The estimated loss of spending derives from government analyses that a 1% loss of GDP resulted in almost £8 billion extra government borrowing. After increasing this to a loss of 2.3%, this adds up to an estimated £17 billion cut to government spending. This has also been coupled with higher government borrowing in general due to a higher amount of spending on the NHS and public services as part of the Conservative Party’s campaign promises.
While it doesn’t appear that the UK economy’s growth has taken a significant hit to a gradual increase in growth rates since 2009 without comparing it to the simulated economy, the simulation predicts that the world-wide economic growth felt in other countries has not influenced the UK economy as much as it has elsewhere. Whether this is a direct result of Brexit, or whether this is due to numerous other factors, such as Austerity measures and Conservative Government Policies leading to decreased public spending and increased inflation, or just natural fluxuations in economic practice on a societal scale, is not currently understood.
The UK’s tax relief bill has increased to a record £164 billion. The relief which mainly goes towards capital gains exemptions on properties (£27bn), reduced VAT rated (£53bn) and pensions income tax relief (£26bn) has been criticised for overwhelmingly helping the rich and being ineffective use of government funds. The new figures call into question whether the funding is being scrutinised properly by government officials.
The tax relief bill is larger than the UK government’s spending on healthcare and could cover the deficit, at its current level, for 4 years.
Tax relief can be used for a variety of reasons but its ever increasing amount should come as a concern to the taxpayer. Examples that show its often inefficient value include Entrepreneurs’ Relief. This has cost the Treasury £20bn over the last decade and has no measurable impact on entrepreneurship despite being dramatically over budget.
Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said:
“Government spending rightly comes under a lot of scrutiny for cost-effectiveness. But tax reliefs often escape even the most basic checks and debate. Today’s figures show that we spend £164 billion on tax reliefs – billions more than we spend on the health of the nation. Given the looming fiscal pressures our country faces, it is particularly hard to justify huge expenditures on Inheritance and Entrepreneurs’ reliefs, both of which overwhelmingly benefit small numbers of the very wealthiest households.
There are also concerns about who benefits most from the tax relief. Proponents of reducing the relief say it overwhelmingly helps the rich. Incentives for business owners who benefit the richest people in Britain have cost the taxpayer £4bn. Capital gains exemptions and pension relief also help the rich disproportionately.
In a statement Peter Dowd MP, Labour’s Shadow Chief Secretary to the Treasury said:
“Today’s publication reveals the extent of tax giveaways which the Tories have allowed to expand without proper scrutiny. Labour is committed to reducing the corporate tax relief bill and saving taxpayers billions.”
The figure excludes tax relief such as personal tax allowance which is a key part of the tax system.
Analysis from Iwan Doherty- Editor in Chief
The figure should not be used directly as a figure for our corporate welfare bill. While tax relief overwhelmingly helps the richest earners it is not only beneficial to them. However, the rapid rise of this figure alongside our rising corporate welfare in other areas should inspire worry and opportunity. If you want to ‘trim the fat’ off spending this is the place to look, not disability benefits. Labour are right to look at tax relief more closely, there is money to be saved here that can be used for those in much greater need.
Tonight, more than 320,000 lives will be at risk. With heavy snow and cold weather due to take the UK by storm, homeless people will be at risk once more.
While you’re lying all snug tonight, spare a thought for homeless people. Tonight, the UK is set to be battered and torn by below freezing winds, 3 inches of snow and very heavy rain. More than ever, homeless lives will be at risk from Hypothermia.
The Tories continue to turn a blind eye to Homelessness, with an estimated homeless population of around 329,000. And it’s growing. The Conservatives policies of extreme austerity continue to tear the United Kingdom apart. Homeless shelters have less funding than ever before, and poverty levels are the highest they’ve been since the great depression.
Cuts to the education sector have resulted in teachers having to pay for glue sticks and paper out of their own wages. Further Education Colleges are struggling to fully provide A-Level qualifications and Primary Schools across the country are cutting back on enrolment to try and save money.
The Irony of this is, I am currently writing this from a table in the corner of my local Conservative club. My mother works a part-time job here, it was the only she could find, and she still doesn’t bring in enough money to cover our rent or bills. I am surrounded by Tories. On a night where they should be worrying about Homelessness, they are instead pondering what to have for lunch, or how many foxes’s they killed on their latest hunt.
Homelessness continues to be ignored. Numbers are rising, people are dying and yet the government does nothing. Amber Rudd’s DWP continues to set unrealistic requirements for benefits. The NHS is unable to provide comprehensive cover for its patients. All as a result of austerity.
The top 1% of our country owns 99% of the wealth. Tim Martin, CEO and Founder of Weatherspoon’s, pays his workers poverty wages and refuses to admit, discuss it or acknowledge what he’s doing is wrong. Jeff Bezos’ Amazon continues to pay less than 0.01% Tax on profits made in this country. James Dyson has moved his company to Singapore, meaning they no longer pay UK tax.
The issue is, in a world where political correctness and media knowledge take priority over everything, homelessness should have been eradicated years ago. We have moved on to what the Tories consider ‘more pressing issues. This means that, despite all the reminders, they continue to disregard homelessness and poverty entirely. The reality of it is, what the Tories are doing is manslaughter by gross negligence.
The Office for National Statistics reported over 1,200 homeless deaths in 2018, a 100.5% increase from 2017. That’s over double 2017’s statistics. The Conservatives negligence of homeless has become unbearable. It’s time, for our own good, that we rise up against the Tories and prove that homelessness is a pressing issue of the highest order.
The British chambers of commerce have warned that its members are planning a mass exit if May allows no-deal Brexit.
Thousands of British companies plan to leave the country should parliament fail to regain control over Brexit. Parliament is entering a crucial week in which MP’s will attempt to regain control over the Government. Their aim? To delay Brexit and prevent no-deal becoming reality. The BBC says that companies who have already undergone relocation are ‘just the tip of the iceberg’. Britain needs to be prepared for another economic crash should the UK leave without a deal. This means lower stock prices, higher inflation and lower wages. This will result in civil unrest and only increase poverty and homelessness.
Theresa May needs to make an urgent decision as to whether or not she will rule out no-deal. Failure to do this will result in an unstable economy. The government needs to puck up its ideas, or we won’t have the Britain we know and love for much longer. We have come full circle, and find ourselves staring into the depths of the 2008 economic crisis again.
A proposal claiming to simplify the distribution of grants by stopping grant allocations from being weighted by relative deprivation and poverty levels of areas has been announced by the Government.
The proposals will take relative deprivation out of the statistical formula used to allocate funds for several services, such as public transport, libraries, leisure centres, family planning, and homelessness, which is around 30% of the budget given to councils each year. Under the legislation the funds would only be rated on the higher costs of running services in rural areas, and not offset by the deprivation of many urban areas, leading to a net gain in average funding for most rural areas at the expense of lower than average funding for deprived urban areas.
Several politicians, most notably local Councillors of urban areas known to have high levels of relative poverty and deprivation, where the largest portion of grants are currently allocated, accused Tory ministers of sparing their own supporting councils while “piling misery” onto more deprived and more left-leaning parts of the UK.
A recent poll found that the United Kingdom has the second highest poverty levels in the European Union, second only to Romania, and higher than both Greece and Spain, two countries known for their economic instability and high levels of poverty and deprivation in recent years.
The backlash, from primarily Northern and metropolitan Council members and their constituents, accused the Fair funding review of local government grant funding as an attempt to alleviate the damages facing the local services of Tory strongholds from austerity cuts at the expense of many more deprived, urban constituencies. These austerity cuts have also been pushed by the same people in the past currently advocating for the new plans.
Sir Stephen Houghton, the current leader of Barnsley Council, called out the Government for their “illogical” plans, and that more deprived areas naturally require higher costs to run local services, especially services such as homelessness, public transport, and street cleaning.
In the past, grants were distributed more often in poorer areas due to the increased need for social care and affordable and council-run housing, as well as the established fact that more deprived areas are far less able to sustain taxes to the level of more affluent areas.
The Ministry of Housing, Communities and Local Government are currently putting the legislation through consultation with not set date for when the legislation goes to the House of Commons to be voted on.
Jeremy Corbyn has tonight tabled a motion of no-confidence against the government.
This means parliament will have an opportunity to vote. MP’s will have to choose between two options, those options are as follows;
– I have confidence in the Government of the current day.
– I do not have confidence in the Government of today.
It is unknown as to whether this motion will be successful. Should it be, Theresa May will likely be forced to resign, and there will be a snap general election. During which members of the public will vote on who there local MP’s are, and, ultimately, who the Prime Minister will be. Jeremy Corbyn will see this as a massive opportunity to get his Labour Party into government. Smaller parties such as the SNP and the Liberal Democrats will be canvassing ferociously to gain seats and put them in prime position to form a coalition government to overthrow the Conservatives.
The future is uncertain, but this stands as a very good chance for Labour to gain seats against their Tory counterparts, and, ultimately try to gain governance.
Trade Unions have raised arms in accusing the government of ‘failing to learn their lesson’ after the collapse of Carillion last year.
Lifetime value of outsourcing contracts awarded in 2017-18 ‘Rocketed’. According to the GMB Union, contracts raised by 53% from £62bn to 95bn. This resulted in nearly £2bn in contracts awarded to Capita and Interserve, with both having issued profit warnings.
We know this government is hell-bent on privatisation after their increased efforts to privatise the NHS. Despite the cautions brought about by the collapse of Carillion, who managed public sector contracts to provide prison maintenance and school dinners among other services.
Rehana Azam, national secretary for GMB said: “What other explanation can there be for this huge increase on outsourced contracts in the year Carillion went bust? Especially when other outsourcing giants look like they’re on life support?”
This criticism from the GMB comes on the first anniversary of Carillion’s demise. The destruction of the service giant resulted in an estimated £150m cost to the taxpayer. Furthermore, major delays have been caused in two multi-million pound hospital construction projects. These projects, due to take place in Liverpool and Birmingham, are vital to local healthcare.
Britains largest trade union; Unite, condemn the lack of action taken on the Carillion directors. Unite assistant general secretary, Gail Cartmail, said: “It’s staggering that a year after the biggest corporate failure in modern UK history, the government continues on as though nothing had happened.”
It is clear the government need to take action, should they survive May’s Brexit vote tonight.
The Government has announced a new task force to tackle money laundering and financially-based organized crime which will involve executives from Santander, Lloyds, and Barclays banks, despite a history of money laundering and tax evasion from all 3 banks.
The task force, known as the Economic Crime Strategic Board, which will consider where resources and finances allocated to tackling money laundering and other economically based crimes are needed.
The task force will be chaired jointly by the Secretary of State, Sajid Javid, and the Chancellor of the exchequer, Philip Hammond.
Sajid Javid announced the new task force with the aim to “take action on all fronts” to stop “the corrupt fraudsters” who are “living luxury lifestyles at the expense of law-abiding citizens”.
However, the decision to include senior bankers from 3 large, multi-national banks on a board that directs the funding of criminal investigations potentially involving assets of the organisations themselves appears on the surface to be an odd decision.
The ex-Chief Executive of Barclays, John Varley, is currently standing trial at the Old Bailey in London and is facing an 11-year prison sentence for his role in the 2008 financial crisis, and is being charged of bribing authorities in Qatar to induce investments from companies in the Middle-Eastern state to avoid being part of the British Government’s bailout in the 2008 crash, which would have decreased stocks in the organisation.
This followed a case that authorities weighed against Barclays bank itself as an entity for the illegal fundraising which was thrown out last year before charges against the bosses themselves were instated.
Various holding of Santander in Europe have also been investigated in the past few years for it’s involvement in supplying its clients with the means to evade taxes through off-shore companies based in tax-havens in Latin America, known as the Paradise Papers.
A leak by IT worker Herve Falciani in 2008, which disclosed the names of 130,000 swiss bank account holders who were suspected of evading taxes, found that the Chief executive of Santander at the time Emilio Botin, and several members of his family, were of the 659 names believed to have been disclosed in the leak and given to Spanish authorities. The case was eventually dropped by the Spanish tax agency following a 200-million-euro settlement.
The Financial Times in 2017 also found that Lloyds Bank may have been aware of money laundering at the Reading Branch of the organisation, after it was found that the Branch had committed fraud totalling around £1 billion.
The fraud saw the Reading Branch working with a corrupt ‘turnaround consultant’ that would take funds from small businesses and launder it over the course of 8 years, and the branch would then follow customers to collect on debts the businesses were unable to pay, leading to evictions from homes and the loss of entire life-savings.
It was found that despite publicly denouncing that any criminality was taking place as the branch before 6 former workers were found guilty of fraud in February 2017, a report prepared in 2007 that investigated claims of criminal misconduct in the Reading Branch personally exonerated a now convicted Lloyds bank worker out of a “lack of evidence”. However, the report itself doesn’t support this conclusion, and Lloyds investigators did find that an administration fee totalling over £150,000 was diverted to an account with the Bank of Scotland and then to an offshore account, and not directly to an account belonging to Lloyds Bank, indicating that money laundering was a clear possibility.
While most Banks already cooperate with financial authorities in money-laundering issues, and the taskforce is primarily set up to focus on low-level and extranational money-laundering schemes from countries such as Russia and Nigeria, the ability for senior executives of banks to have direct input into the financing, and by extension, the investigation of financial crimes by the government could mark a dangerous precedent whereby Banks are increasingly being placed ‘above the law’ when it comes to money laundering, creating an attitude that Banks are getting ‘too big’ to be effectively controlled by the UK state, one of the major contributing factors to the 2008 financial crash.