MPs Demand £22bn In Unpaid Debts Be Collected

A report by MPs has slammed the Government for failing to chase down at least £22bn of debts owed to the Treasury.

The Public Accounts Committee was reacting to an earlier study by the National Audit Office which calculated, that of March last year, £15bn was outstanding from HM Revenue and Customs.

The Department for Work and Pensions and the Ministry of Justice accounted for most of the remainder.

Margaret Hodge believes taxpayers are being failed

The MPs accused ministers of failing to take a strategic approach to the issue and warned that failure to minimise the volume of debt outstanding - ranging from unpaid fines and taxes to overpaid tax credits - was having a direct impact on Government borrowing volumes.

They recommended each department was given targets to recover what debt they could though vulnerable debtors should not be pursued inappropriately.

Committee chair Margaret Hodge said: "The Government is owed this massive amount of money but it has failed to take a strategic, cross-government approach to managing that debt and getting more money paid to the Exchequer".

The report added: "Government inaction has led to large volumes of old debts building up in departments which are unlikely to be collected.

"While the Treasury and the Cabinet Office say they are belatedly developing a cross-government strategy for debt, we are concerned that the centre has taken so long to drive improvements in debt collection, given that this should be a basic business activity, and given the huge volume of bad debts that are written off each year".

Another conclusion suggested departments review their use of debt collection agencies.

14.47 | 0 komentar | Read More

IFS: Recession Has Hit Young Adults Hardest

Young people have "borne the brunt of the recession" with their pay and job prospects hit much harder than older generations, a leading economic think tank has said.

The Institute for Fiscal Studies (IFS) found that among those aged 22-30 household incomes fell 13% between 2007-2013, wages plunged 15% and employment levels dropped by four points.

For those aged 31-59, income fell by 7%, wages by 6% and employment stayed stable, while the over-60s saw almost no impact on those measures.

The gap would have been even more pronounced but for the 25% of young adults still living with their parents, the IFS said.

The think tank - working with the Joseph Rowntree Foundation (JRF) social research charity - based its conclusions on the Government's Household's Below Average Income data.

It also found there was "no clear north-south divide" in recession-hit areas - with a wide spread in falls in median income from 8% in Northern Ireland to 2% in the East Midlands.

The IFS pointed out that a sustained period of low interest rates and real-terms falls in private rents had benefited young people's finances but that home ownership continued to plummet - spelling further costs for a generation of renters.

Only 21% of people born in the mid-1980s had bought their own place by the age of 25 - compared with 34% of those a decade earlier and 45% born in the mid-1960s, it said.

IFS research economist Jonathan Cribb said: "Pay, employment and incomes have all been hit hardest for those in their 20s. A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects."

JRF head of poverty research Chris Goulden said the research showed how a shortage of affordable homes and rising rent costs were forcing some 600,000 people to live below the poverty line after paying housing costs.

He said: "We need a comprehensive strategy and sufficient political will to get to grips with poverty. That means addressing low pay, the high cost of essentials, such as housing and childcare, and reform to the tax and benefits system to ensure work is a route out of poverty."

Labour Treasury spokeswoman Catherine McKinnell said: "While David Cameron denies there is a cost-of-living crisis, these figures show people have seen a substantial fall in their income since 2010.

"The IFS's research shows that young people have been hit particularly hard over the last few years.

"Labour will act by boosting apprenticeships and making sure young people who don't have the skills they need to get a job are in training, not on benefits."

A Treasury aide said: "This shows just how hard Labour's great recession hit young people and why it's vital we keep working through our long-term economic plan which is cutting the deficit, creating jobs and equipping people with the skills they need for the future."

14.47 | 0 komentar | Read More

Payday Loan Caps To Cut The Cost Of Borrowing

The City regulator is to impose caps on payday loans from January to tackle abuses in the quick-credit market, in a move set to cost the industry 42% of its annual revenue.

The headline measure was a limit in the overall cost of a loan, which the Financial Conduct Authority (FCA) said should never exceed 100% of the total amount borrowed.

For example, if a borrower was to take out a loan of £300, the person's liability would not be more than £600.

Fixed default fees were also to be capped at £15, the regulator said, with interest on unpaid balances and default fees not exceeding 0.8% per day of the outstanding amount.

News of the restrictions - reported by Sky News on Monday night ahead of the announcement - prompted the industry body the Consumer Finance Association (CFA) to warn that the limits could force many of its members out of business, driving customers towards loan sharks instead.

The FCA admitted the measures were likely to cost the payday sector £420m annually but its chief executive Martin Wheatley dismissed the industry's claim as a "scare story."

He said: "For the many people that struggle to repay their payday loans every year this is a giant leap forward.

"From January next year, if you borrow £100 for 30 days and pay back on time, you will not pay more than £24 in fees and charges and someone taking the same loan for 14 days will pay no more than £11.20. That's a significant saving.

"For those who struggle with their repayments, we are ensuring that someone borrowing £100 will never pay back more than £200 in any circumstance.

"There have been many strong and competing views to take into account, but I am confident we have found the right balance.

"Alongside our other new rules for payday firms - affordability tests and limits on rollovers and continuous payment authorities - the cap will help drive up standards in a sector that badly needs to improve how it treats its customers."

The measures were announced 24 hours after Wonga - the country's biggest payday lender - confirmed its new chairman was to lead a drive to improve standards in the wake of damaging revelations the firm created fake legal letters to threaten borrowers in arrears.

Citizens Advice chief executive Gillian Guy said of the caps: "Up until now, payday lenders have had the green light to send people into a spiral of unmanageable debt.

"The cap will help limit the scale of debts but its success will depend on enforcement and is part of a raft of measures, including limiting rollovers, that the FCA must make sure lenders are sticking to."

14.47 | 0 komentar | Read More

Energy Complaints Soar To All-Time High

Ofgem's Energy Market Probe 'Will Restore Trust'

Updated: 1:22pm UK, Thursday 26 June 2014

Ofgem has announced an investigation in the energy market, to ensure there are no barriers to effective competition.

The regulator said it has referred the energy market to a probe by the Competition and Markets Authority (CMA).

It said the investigation is the best way to ensure that consumers are receiving the best quality, service and price availability.

The so-called big six energy providers have come under increasing scrutiny over profits, rising prices and how their wholesale and retail firms are structured.

The six big firms control around 95% of the UK retail market.

Ofgem said it would continue to protect consumers amid planned major changes to the energy market.

It said the CMA would begin its investigation immediately and a final report would likely be published before the end of next year.

Ofgem chief executive Dermot Nolan said: "Now is the right time to refer the energy market to the CMA for the benefit of consumers.

"There is near-unanimous support for a referral and the CMA investigation offers an important opportunity to clear the air.

This will help rebuild consumer trust and confidence in the energy market as well as provide the certainty investors have called for.

"The energy market is also going to change rapidly over the next few years with the roll-out of smart meters, the Government's electricity market reforms, and closer integration with European energy markets."

The energy watchdog said it has made an assessment, along with the Office for Fair Trading and the CMA, and found that competition is not working in consumers' best interests.

The regulator now expects the CMA  to consider action against the sector to improve competition and protect consumers.

Ofgem will also use its powers to address any "structural or behavioural issues" that may undermine competition.

After the announcement was made SSE chief executive Alistair Phillips-Davies said: "This reference will be an important opportunity to demonstrate the competitiveness of the energy market, address any issues of public concern and deliver good outcomes for consumers and a stable framework for investors.

"Throughout the reference SSE has an appetite for reform that is in the interests of customers and competition generally, as demonstrated by our price freeze until 2016."

Centrica CEO Sam Laidlaw, of the parent company of British Gas, said: "We want an energy market that is trusted by customers, and we believe that an in-depth and thorough review by an independent and respected authority can help to achieve this. So Centrica welcomes the investigation."

14.47 | 0 komentar | Read More

£1.1bn To Fight Terror And Cyber Threats

RAF's New Fighter Jet Misses Air Show Debut

Updated: 5:11pm UK, Sunday 13 July 2014

By Alistair Bunkall, Defence Correspondent

The Royal Air Force's expensive new fighter jet has failed to make its long-awaited UK debut after a fire grounded the entire fleet of aircraft.

The F-35 Joint Strike Fighter (JSF) is known as the Lightning II in the UK and is supposedly the future of military aviation.

It had been due to fly at the Farnborough Air Show in Hampshire on Monday, after failing to make the Royal International Air Tattoo in Fairford, Gloucestershire, on Friday.

But in a hugely embarrassing glitch for the Government, the costly planes will have to remain on a runway in Florida until engineers can be sure the fire was caused by an isolated fault.

A senior British defence source told Sky News that Lockheed Martin, the primary manufacturers, and the Pentagon will "get a shoeing" over the grounding.

The UK is investing billions of pounds and staking the reputation of the military on the eventual success of the F-35 programme.

Four of the Lightning II jets were due to fly over Farnborough and organisers of the show said they were "hopeful" the aircraft would make its transatlantic journey by the end of the week.

They added: "We fully support the stance to never compromise safety of either pilots or show participants and we thank them all for their continued hard work."

To coincide with the aircraft's planned appearance at Farnborough, the UK Government is expected to announce how many aircraft it will buy in its first tranche of orders.

Later this decade, the F-35 will fly off the new Queen Elizabeth aircraft carrier, which was officially named last week.

The aircraft can take off on a short runway and land vertically - much like its predecessor, the Harrier.

The F-35 Lightning II programme has been beset by problems, with aircraft grounded on a number of occasions and spending that has run wildly over budget.

Different versions are being built by Lockheed Martin for the US Marines, the US Air Force and the US Army.

The UK is known as a "tier one" partner, meaning it is the most important contributor after the Pentagon.

Despite much criticism and speculation over the aircraft's future, Washington and London will not back out.

A spokesman for the Ministry of Defence said the UK "remains fully committed" to the programme.

To cover the humiliation of the F-35's absence, the Government may make announcements about increased defence capabilities instead.

Sky News understands the lifespan of the Sentinel surveillance plane will be extended.

The fleet had been earmarked for retirement but has seen strong demand in recent years in Mali, Ukraine, Afghanistan, Nigeria and Libya.

14.47 | 0 komentar | Read More

Shire 'Welcomes Higher Abbvie £31.3bn Bid'

The board of London-listed pharmaceutical firm Shire confirmed on Monday it had entered "detailed" discussions with US firm Abbvie after receiving an improved takeover offer of £31.3bn.

Shire said it was ready to recommend a deal which would value it at £53.20 per share - a rise of more than £2 per share on its last bid less than a week ago.

Under the terms of the cash and stock offer AbbVie, which wants to buy Shire to cut its tax bill and diversify its product line-up, would own 75% of the new entity.

Dublin-based Shire, which makes drugs to treat rare diseases, had rejected four earlier offers and asked AbbVie to sweeten its offer in order to recommend an agreement.

Discussions are taking place in an effort to complete a deal.

It would give AbbVie an opportunity to reduce its tax bill by shifting its tax base from the United States to the UK, where corporate tax rates are significantly lower.

The company is also under pressure to secure new products as it currently gets nearly 60% of its revenue from rheumatoid arthritis drug Humira, the world's top-selling medicine, which loses US patent protection in late 2016.

14.47 | 0 komentar | Read More

Shareholders Slam £23m Burberry Boss Pay Deal

More than half of shareholders at the annual general meeting (AGM) for luxury retailer Burberry have rejected a pay deal worth up to £23.6m for the chief executive.

Some 52% of votes cast in the non-binding ballot did not support the remuneration report for Christopher Bailey or the other executive directors of the 158-year-old retailer's plan.

Included in the payment is his annual salary of £1.1m – which has not changed since his last role – and a golden handshake worth £7.25m provided to Mr Bailey if he loses his job.

It would also include his £440,000 allowance, which Burberry said does not include allowances for clothing or a company car.

A large part of the package includes a performance-based bonus and participation in the firm's executive share plans, any awards from which will vest from 2017.

Chairman John Peace defended Mr Bailey's pay at the meeting, arguing that the pay is comparable with competitors.

Burberry defended the pay deal for CEO Christopher Bailey

He said: "We know the amount paid to Christopher is a lot of money but much of it is performance related."

Mr Bailey took on the role of chief executive alongside his role as chief creative officer last May. He joined the firm in 2001.

Burberry also defended Mr Bailey ahead of the AGM.

It said: "The board believes that Christopher's vision and leadership will keep Burberry on the forefront creatively, digitally and financially."

But the Institute of Directors (IOD) said the revolt was a "warning shot" over pay concerns.

IOD director of corporate governance Dr Roger Barker said: "Burberry shareholders have fired a warning shot with today's vote.

"They are clearly not convinced that executive pay at the company has been transparently linked to tough performance targets.

"The onus in now on the board to urgently engage  with shareholders to convince them they are responding to their understandable concerns."

Burberry also mentioned in its 2013/14 annual report that Mr Bailey's promotion would "create further value for shareholders in the next exciting stage of its evolution".

Earlier this week, the Investment Management Association gave Burberry an "amber top" rating on the proposed pay policies, hinting that its members, who account for 15% of the stock market, should carefully read into Mr Bailey's awards before making a final decision.

As well as the controversial pay deal, other issues debated at the London AGM include the directors' remuneration policy and report.

The meeting comes after shares in the designer brand rose 2% on the FTSE 100 early on Thursday, when like-for-like sales were up by 12% in the three months from June 30.

14.47 | 0 komentar | Read More

Cable Plots Tougher Foreign Takeover Rules

By Mark Kleinman, City Editor

Vince Cable is to set out new proposals to force buyers of key British companies to make watertight commitments aimed at protecting jobs and research budgets.

The Business Secretary is expected to detail plans that would oblige foreign bidders for UK businesses to offer binding guarantees to the City's takeover watchdog in order to prevent the erosion of Britain's knowledge base.

His pledge will come less than two months after the American pharmaceuticals giant Pfizer's interest in a £69bn takeover of AstraZeneca ignited a political storm in Westminster about a perceived threat to scientific research and development in Britain.

Mr Cable is understood to want to strengthen the powers of the Takeover Panel, which oversees mergers and takeovers involving British companies, but his plans will nevertheless fall short of the more stringent regulatory framework for which Labour has been calling.

The Business Secretary's proposals are expected to be set out later this weekend.

It was unclear on Saturday whether Mr Cable would require legislative change to push through his proposals or whether there would be a formal threshold above which acquirers of UK companies would be forced to adhere to any new rules.

Currently, the formal public interest test which gives politicians power to intervene in corporate deals is restricted to areas such as media plurality and financial stability.

The Takeover Panel, which regulates mergers and acquisitions, can force foreign bidders for UK companies in any sector to make or clarify public statements about their intentions.

However, it is not deemed by ministers to have sufficiently robust powers to compel companies to make legally-binding commitments on issues such as jobs and R&D.

Promises made by Kraft on UK jobs and manufacturing were reneged upon

That became a politically sensitive issue under the last Labour Government, when Kraft Foods of the US reneged on a pledge to retain a Cadbury manufacturing facility in the UK.

Speaking before a House of Lords select committee earlier this week, Mr Cable said he was not interested in introducing rules purely designed to protect the Union flag, pointing out that Britain's biggest manufacturer is Tata, the Indian conglomerate which owns Jaguar Land Rover.

"A crude nationality test has no merit," he said.

Hinting at a possible strengthening of the Takeover Panel's powers, he also said that an extension of the national interest test could risk breaching European Union law.

Ian Read, Pfizer's chief executive, said in May he regarded commitments to UK jobs made during the recent bid situation as legally enforceable.

When Pfizer abandoned its offer two months ago, Chuka Umunna, the Shadow Business Secretary, reaffirmed his commitment to subjecting the deal to a public interest test if a fresh approach was made under a Labour administration.

"While Labour was standing up for British jobs and British science throughout this takeover bid, David Cameron and his ministers were cheerleading for it when one of the primary motivations behind the deal was financial engineering - cited by the AstraZeneca board as one of the execution risks justifying rejection of the bid," he said at the time.

Pfizer was forced to walk away from its bid after a string of rejections by the AstraZeneca board, despite a desire from some of the UK company's shareholders for it to engage with its suitor.

AstraZeneca could invite Pfizer to enter fresh talks towards the end of August, although it would be late November before the US company could make a new unsolicited approach under Takeover Panel rules.

14.47 | 0 komentar | Read More

Chinese Takeaway For £900m PizzaExpress Chain

Cable Plots Tougher Foreign Takeover Rules

Updated: 12:07am UK, Sunday 13 July 2014

By Mark Kleinman, City Editor

Vince Cable is to set out new proposals to force buyers of key British companies to make watertight commitments aimed at protecting jobs and research budgets.

The Business Secretary is expected to detail plans that would oblige foreign bidders for UK businesses to offer binding guarantees to the City's takeover watchdog in order to prevent the erosion of Britain's knowledge base.

His pledge will come less than two months after the American pharmaceuticals giant Pfizer's interest in a £69bn takeover of AstraZeneca ignited a political storm in Westminster about a perceived threat to scientific research and development in Britain.

Mr Cable is understood to want to strengthen the powers of the Takeover Panel, which oversees mergers and takeovers involving British companies, but his plans will nevertheless fall short of the more stringent regulatory framework for which Labour has been calling.

The Business Secretary's proposals are expected to be set out later this weekend.

It was unclear on Saturday whether Mr Cable would require legislative change to push through his proposals or whether there would be a formal threshold above which acquirers of UK companies would be forced to adhere to any new rules.

Currently, the formal public interest test which gives politicians power to intervene in corporate deals is restricted to areas such as media plurality and financial stability.

The Takeover Panel, which regulates mergers and acquisitions, can force foreign bidders for UK companies in any sector to make or clarify public statements about their intentions.

However, it is not deemed by ministers to have sufficiently robust powers to compel companies to make legally-binding commitments on issues such as jobs and R&D.

That became a politically sensitive issue under the last Labour Government, when Kraft Foods of the US reneged on a pledge to retain a Cadbury manufacturing facility in the UK.

Speaking before a House of Lords select committee earlier this week, Mr Cable said he was not interested in introducing rules purely designed to protect the Union flag, pointing out that Britain's biggest manufacturer is Tata, the Indian conglomerate which owns Jaguar Land Rover.

"A crude nationality test has no merit," he said.

Hinting at a possible strengthening of the Takeover Panel's powers, he also said that an extension of the national interest test could risk breaching European Union law.

Ian Read, Pfizer's chief executive, said in May he regarded commitments to UK jobs made during the recent bid situation as legally enforceable.

When Pfizer abandoned its offer two months ago, Chuka Umunna, the Shadow Business Secretary, reaffirmed his commitment to subjecting the deal to a public interest test if a fresh approach was made under a Labour administration.

"While Labour was standing up for British jobs and British science throughout this takeover bid, David Cameron and his ministers were cheerleading for it when one of the primary motivations behind the deal was financial engineering - cited by the AstraZeneca board as one of the execution risks justifying rejection of the bid," he said at the time.

Pfizer was forced to walk away from its bid after a string of rejections by the AstraZeneca board, despite a desire from some of the UK company's shareholders for it to engage with its suitor.

AstraZeneca could invite Pfizer to enter fresh talks towards the end of August, although it would be late November before the US company could make a new unsolicited approach under Takeover Panel rules.

14.47 | 0 komentar | Read More

The Week's Big Business Stories

Watchdog's Warning Over In-App Purchases

Updated: 2:24pm UK, Friday 11 July 2014

A consumer watchdog has warned parents to check settings on their mobile devices, after Amazon was sued over children making unauthorised in-app purchases.

Britain's Competition and Markets Authority (CMA) told Sky News: "Our advice to parents is to check their device settings, play their child's games themselves and read the game's description online.

"The CMA (and its predecessor the Office of Fair Trading) has been working closely with the online and apps based games industry, both in the UK and Europe, to put safeguards in place to ensure children are protected from making unauthorised payments and that customers are always treated fairly.

"If they have any concerns at all, they should contact Citizens Advice."

The warning comes after the US Federal Trade Commission (FTC) launched legal action over claims the online retail giant has not done enough to stop children spending money without parental consent.

The company said it would not agree to an out-of-court settlement with the FTC.

Amazon previously said that it was prepared for a court battle and that it had refunded parents who complained after being billed for the apps.

The dispute centres on children's games downloaded via Kindle tablets, and the difficulty differentiating virtual and real currency for purchase of virtual items.

In-app charges were introduced in 2011 and no password was required for purchases between $0.99 and $99 (£57).

The following year passwords were introduced for purchases over $20 (£11.60).

But the FTC said that although it updated password procedures last year, there was a period where children could still buy apps.

One customer complained that her daughter had incurred charges of more than $350 (£200) while playing a game.

The FTC said thousands of consumers had been affected and unauthorised charges ran into the millions.

FTC consumer protection director Jessica Rich said: "A central tenant in consumer protection is that you need to obtain consumer consent before placing charges on their bills.

"That applies all places, from brick-and-mortar stores to app stores."

The legal action seeks both refunds for consumers and a ban on billing account holders for in-app charges made without their consent.

Last week the FTC launched a similar lawsuit against T-Mobile, and in January it reached a $32.5m (£19m) settlement with Apple over in-app charges.

Charges racked up by children without parental consent has also caused concern for PayPal, which is owned by eBay.

In April, Sky News revealed PayPal was changing its terms and conditions for account users.

A new clause, activated last month, said users must agree to "take all reasonable steps to protect the security of the personal electronic device through which you access the Services (including, without limitation, using pin and/or password protected personally configured device functionality to access the Services and not sharing your device with other people)."

Paypal denied it was banning account users sharing their computers.

A spokesman said: "The new wording in our User Agreement says that users should take reasonable care when sharing devices so their PayPal account is not compromised."

Meanwhile, the celebrated children's author Allan Ahlberg revealed he turned down a lifetime achievement award after learning it was sponsored by Amazon.

In a letter to the Bookseller, he complained about Amazon's UK tax arrangements, whereby revenue earned in Britain is accounted for in low-tax Luxembourg.

Amazon's UK subsidiary reached sales of £4.3bn last year but it paid only £4.2m in tax.

Amazon.co.uk saw a 56% rise in profit to £17m during 2013, along with a 13% rise in UK revenue.

Mr Ahlberg wrote: "Tax, fairly applied to us all, is a good thing. It pays for schools, hospitals - libraries!

"When companies like Amazon cheat - paying 0.1% on billions, pretending it is earning money not in the UK, but in Luxembourg - that's a bad thing.

"We should surely, at the very least, say that it is bad and on no account give it any support or, by association, respectability."

Approached by Sky News, Amazon UK declined to comment on Mr Ahlberg's action and it was awaiting a response from the US parent firm about the FTC action.

14.47 | 0 komentar | Read More