HMRC to stop collecting data on richest one per cent

“Institute for Fiscal Studies warns about accumulation of wealth by top 1% and says HMRC proposals to stop collecting data would create misleading picture:

Proposals by the UK government to stop collecting information showing how the wealthy pass on their assets from one generation to another have been condemned by the Institute for Fiscal Studies, a leading tax and spending thinktank.

The IFS said Britain was in danger of allowing a misleading picture to emerge of its richest families – the top 1% whose wealth is at least £1.4m including the value of their home – that underestimates their wealth.

The warning follows a debate about the assets and influence of Britain’s top 1% of wealthy households following the leak of the Panama Papers, which revealed the offshore holdings of many rich individuals.

The IFS said calculations that failed to include the often complex web of trusts and jointly owned properties that the richest families use to avoid capital gains and inheritance tax would depress the overall measure of wealth.

It said that in 2005 the under-recording and differences in valuation of inherited estates increased the total from £3.4tn to £4tn.

The inclusion of family trusts, jointly owned properties and small properties, which the IFS said were excluded from the standard published data, raised the total to £5tn – 46% higher than the total initially identified by officials.

A special issue of the IFS journal Fiscal Studies argues that the accumulation of wealth by the top 1% has meant the “younger generations are on course to have less wealth at each point in life than earlier generations”.

Adding to a welter of analysis that points to wealth – rather than incomes – providing the biggest split in society, it said inheritances will do little to even out the spread of wealth, leaving younger people from poorer families unable to acquire assets already in the hands of the top 1%.

The IFS said the acquisition of expensive houses, generous occupational pensions and trust funds in offshore havens have helped to cement the wealth of the top 1% for their children and grandchildren.

In response to moves by HMRC to stop gathering wealth data on the top 1%, the report said: “Wealth is a key determinant of wellbeing. It matters to households whether they have enough savings to see themselves through retirement and it matters for how they would respond to economic shocks and to fiscal and monetary policy. So understanding the distribution of wealth matters.

“So it is concerning that HMRC have consulted on discontinuing their publication of statistics on top shares of wealth, which are derived from data on bequests. These statistics have for decades given us the only, albeit imperfect, window into the wealth of the very richest,” they said.

A spokesman for HMRC said: “We will continue to publish statistics on wealth, but we have asked for views on whether HMRC should continue to produce wealth statistics in the way we currently do as the data we use is derived from inheritance tax information. Since 2006 the ONS have issued regular wealth surveys, but based on household assets. We want to streamline this.”

The report’s authors said ONS wealth surveys relied on feedback from households over a long period of time and many respondents had given up filling in survey forms by the time they retired. It also missed out on probate data that documents household wealth when a respondent is deceased.

“We have been learning a lot about the wealth distribution in recent years, especially following the introduction of the Wealth and Assets Survey. But this survey cannot tell us much about the top 1% who hold around 20% of household wealth,” they said.”

http://gu.com/p/4tem2

Government scraps proposed changes to trade union funding – Tory peers not prepared to back the change

It seems there are now THREE Conservative parties: Bremain, Brexit and Bolshie Lords!

U-turn on plan to abolish ‘check-off’ system follows threatened rebellion in Lords and will be seen as major victory for unions:

The government is to drop a controversial proposal to change trade union funding arrangements after a threatened rebellion in the House of Lords.

Under plans included in the trade union bill all civil servants and staff in the wider public sector who belong to a union would have had to switch to direct debits or make other arrangements to pay their fees.

But a cabinet office minister admitted the government had failed to convince Tory peers to vote for the proposal and said it would be dropped from the bill.

The decision will be seen as a major victory for public sector unions which had claimed the proposal was a vindictive attack on their finances.

Tories forced to rethink trade union crackdown after Lords defeat
Critics had warned that a switch to direct debit payments would see members leave trade unions and no longer be able to access services they provided such as help with cheap loans, debt advice and legal aid.

In the report stage debate in the Lords,the cabinet office minister Lord Bridges acknowledged many Tory peers opposed the measure.

“I fear that my trying to convince you of our case may simply add grist to the mill of those who see this measure as a means of undermining trade unions themselves. This is certainly not and never has been the government’s intention,” he said. ….”

http://gu.com/p/4tf3q

“Minister admits lights would stay on even if Hinkley nuclear plant is delayed”

UK energy secretary admits for the first time that any delays or cancellations to new nuclear reactors would not compromise national energy supply:

The UK’s energy secretary has admitted for the first time that the lights would stay on if new nuclear reactors at Hinkley were cancelled or delayed.

Amber Rudd has previously said that “energy security has to be the number one priority” and that new gas and nuclear power would be “central to our energy-secure future”.

But in a letter released on Tuesday in reply to MPs on the energy and climate change select committee, which asked what contingency plans were in place if Hinkley is delayed or cancelled, she said: “While we have every confidence the deal will go ahead, we have arrangements in place to ensure that any potential delay or cancellation to the project does not pose a risk to security of supply for the UK. I am clear that keeping the lights on is non-negotiable.”

She also said that delays to the troubled plant could risk the UK missing its targets to cut carbon emissions, and that alternatives could cost more but would not represent a “significant increase” in cost in the short term.

The final decision by French-state owned company EDF to go ahead with Hinkley has been repeatedly delayed and the billion of pounds of state subsidies and the feasibility of the giant project have been widely criticised. Last week one of the UK’s major investors, Legal and General, called Hinkley “a total waste of money”.

EDF, their Chinese partners and the UK and French governments have insisted Hinkley will be built, with French economy minister Emmanuel Macron saying on Sunday the project would go ahead.

In Rudd’s letter, she says: “Macron has publicly provided assurances that ‘the decision must be agreed ahead of EDF’s shareholder meeting [12 May]’.” In March, EDF’s finance director resigned and its trade unions have warned the Hinkley project could severely damage the company.

Rudd said that without Hinkley, energy security would come from the capacity market, where the government offers subsidised contracts for guaranteed electricity supply. The Institute for Public Policy Research has called the capacity market “unfit for purpose”.

Rudd said there was also “detailed monitoring and governance arrangements to ensure we have sufficient intelligence and foresight on any issues that might delay construction further down the line, so that alternative capacity can be put in place.”

She said alternative sources of supply “would be unlikely to present a significant increase” in energy bills for delays known about before 2021. But she also warned: “There is also a risk though that any delay could put at risk our decarbonisation targets – one of the key reasons the government is supporting Hinkley Point C in the first place.”

A report from the government’s National Infrastructure Commission in March found that “smart power – principally built around three innovations, interconnection, storage, and demand flexibility – could save consumers up to £8bn a year by 2030, help the UK meet its 2050 carbon targets, and secure the UK’s energy supply for generations.”

Angus MacNeil, chair of the energy and climate change committee, said: “[Rudd’s] letter shows the government has had to finally concede the need for a Plan B on Hinkley, although the detail is sketchy. New capacity must be brought online in a way that is compatible with our decarbonisation targets. That means limiting the role of fossil fuels and maximising the use of smarter low carbon options to meet demand.”

The shadow energy and climate secretary, Lisa Nandy, said: “This letter is new evidence that ministers have lost control over the future of this project. We now need to see a detailed plan B that protects billpayers and ensures we achieve legally binding pollution goals.”

Rudd was also asked by the select committee what liabilities taxpayers would face if the project was cancelled at this stage. She said: “At this stage, as no contracts have yet been signed, there are no liabilities which would fall to the UK taxpayer or consumer.”

But she said, once the contracts are entered into, there were small risks of compensation payments if the project was cancelled, though these are “almost entirely within the control of the UK government”. In March, the Guardian reported that the Hinkley deal contains a “poison pill” which could leave taxpayers with a £22bn bill if a future UK government closed the plant before 2060.

John Sauven, Greenpeace’s UK director said: “There is absolutely no reason that the UK could not meet our decarbonisation targets if the government dropped Hinkley and gave renewable energy businesses a fraction of political and financial support that nuclear and fossil fuel companies enjoy.”

http://gu.com/p/4tezz

‘One in four executives believes ‘corruption and bribery is rife in UK’ ‘

“More than one in four business leaders believe bribery and corruption is rife in the UK, according to survey conducted by accountants EY.

Twenty-eight per cent of UK respondents said corruption was widespread – an increase from 18% a year earlier – although lower than the 39% average of respondents to the survey conducted in 62 countries.

“Our survey finds that more than one in four executives in the UK believe that bribery and corrupt practices happen here, a worryingly high number in a country that prides itself on its strong corporate governance,” said EY’s Jim McCurry.

Ninety-eight per cent of UK respondents to its 14th annual global fraud survey also said they recognised the importance of being able to establish the ownership of entities with which they are doing business – a factor highlighted in the publication of the Panama Papers earlier this month.

Overall, 91% of the 3,000 senior executives from 62 countries who took part in the survey supported enhanced beneficial ownership transparency.
Last week in Washington, George Osborne and his counterparts from France, Germany, Spain and Italy announced new rules that will lead to the automatic sharing of information about the true owners of complex shell companies and overseas trusts.

The chancellor said the enhancing regulations were “a hammer blow against those that would illegally evade taxes and hide their wealth in the dark corners of the financial system”.

The survey, conducted before the details of 11.5m files from the Panamanian law firm Mossack Fonseca were made public, also found that half of all respondents were prepared to justify unethical behaviour to meet financial targets. This was a greater proportion than the 36% that could justify such behaviour to help a company survive in an economic downturn.

The EY report said: “Worryingly, deeper analysis of our survey results identifies that many respondents who are [chief financial officers] and finance team members, individuals with key roles in protecting companies from risks, appear ready to justify unethical conduct. The apparent willingness of these respondents to act unethically when under financial pressure is concerning. Could certain compensation arrangements be encouraging such behaviours?”

The survey found that respondents, though, believed that bribery and corruption did not take place in their own sectors. While 39% globally said they believed it happened in their country, only 11% said they thought it was the case in their sector.

“Bribery and corruption continue to represent a substantial threat to sluggish global growth and fragile financial markets,” the report said. “Despite increased regulatory activity, our research finds that boards could do significantly more to protect both themselves and their companies.”

Respondents in the UK also regard cybercrime as a high risk, with 80% of respondents citing it as a concern – more than elsewhere in the world.
“With the continuing enforcement of anticorruption measures, coupled with recent revelations about the misuse of offshore financial structures, business leaders here need to be focused on securing a deeper understanding of their clients, partners and suppliers. Enhanced transparence is only likely to rise up the political and public agenda, both here and in the rest of the world,” said McCurry.

He said EY, which itself has a tax practice, complied with ethical standards.

EY conducted 2,825 interviews 62 countries with executives responsible for tackling fraud – 50 of them were in the UK.”

http://www.theguardian.com/business/2016/apr/19/one-in-four-executives-believes-corruption-bribery-rife-uk

“Those who can’t afford a home are being abandoned”

“Cash from council sell-offs will go to high-earning first-time buyers. It’s a huge blow to social housing.

Is this the worst thing this government has done? That’s a tough choice for those low-earning households written off as unlikely to vote Tory. Governments come and go, attempting to reverse each other’s actions – Labour spends more, then Tories cut back, but the housing and planning bill now in the Lords will do virtually irreparable damage.

The bill takes away properties from those who can never afford to buy, to give a large subsidy to better-off aspiring under-40s to buy starter homes. Council and housing association homes will be sold off, deliberately transferring housing provision from the worst-off to those above them – another trickle up.

This bill forces housing associations to sell homes to tenants (probably only the better-off ones) at a discount. To compensate housing associations, councils will be obliged to sell their most valuable properties – so two social homes are lost for each one sold. The money raised by the local authority sales will also pay for 20% discounts to first-time buyers of starter homes at prices of up to £450,000.

All parties want more home ownership, falling fast because of high prices. Generation rent is paying more to landlords than a mortgage costs. The injustice is in making councils pay for this subsidy from resources earmarked for families on waiting lists, instead of meeting it from general taxation.

Once sold, these homes can never be brought back into the social sector. Of the 2m council properties sold so far, over a third have ended up with private landlords who charge high rents. For every nine council homes sold, only one replacement has been built.

That’s why this is an un-housing bill. It will lose 180,000 social homes in the next five years, with 88,000 council homes gone, according to the local government association. George Osborne’s eye-catching 1% cut to social rents has already stopped dead plans to build 14,000 social homes, says the Institute for Fiscal Studies. Nor does the rent cut help most tenants, who just get it clawed back from housing benefit.

Worse is to come. As more people have moved on to universal credit, with their rent no longer automatically paid, 89% have fallen into arrears so far, further depleting money for new social housing. A third of housing associations are building no new affordable homes.

The bill is punitive towards tenants, making any council-house family who together earn more than £30,000 (£40,000 in London) pay a market rent, often so steep they will have to leave. The Treasury will snatch this pay-to-stay extra rent – so it can’t be used for local housing. New tenants only get short tenancies of two to five years so they risk joining the insecure multitude of families in the private sector with six-month rental agreements.

Security was the great gift of social housing. A family knew they would stay near their jobs and schools, make local bonds and join lasting communities. Good estates have stable populations, which include some people with average incomes. How do you educate children who keep moving schools, never settling? Already there are 1.5 million children growing up in private rented homes, without security of tenure.

A family support worker I spoke to last week was struggling to help a family who had moved four times in just over two years – because of temporary housing and short tenancies – with the children moving schools each time. One mother, sent to a distant town, had been leaving home for a bus at 6am every morning to try to keep her children in their old school two hours away, in the hope she would find a home in their old neighbourhood; but she had to give up.

A few weeks ago I spent time in court watching eviction cases, talking to tenants whose lives had become rootless through insecure jobs causing arrears. Landlords are eager to re-let flats at higher rents as prices soar. Most of those families will never reach the safe haven of a council home.

Ending social housing is part of the great escape from the welfare state planned by David Cameron and Osborne. But they may yet again be tripped up by their failure to think beyond ideology. Are they really willing to abandon the third of citizens who can never join their homeowning democracy? Tipping them on to the street is embarrassing, which is why the rising number of street homeless were given a small bung in the budget.

If not abandonment, then there are only two options: build social housing at a cheap rent; or leave people to private landlords where housing benefit picks up the bill. Even capped, housing benefit is extravagantly wasteful when – as Labour’s housing spokesman, John Healey, points out – building social housing makes a profit from rent after 20 years, by far the cheaper option. The government hasn’t dared abolish councils’ duty to house the vulnerable or homeless families with children, but how can they do that with ferocious budget cuts and this bill stripping away existing properties?

No wonder Tory as well as Labour council leaders are up in arms. Surrey’s leader wrote to the Guardian to protest at being forced to sell his council houses. Good for the Lords, who tonight followed up last week’s rebellions with more amendments to pay-to-stay plans. Valiant objections from trusted crossbenchers, such as Bob Kerslake, former head of the civil service, may force the government to soften some terms.

But nothing will prevent the main provisions passing: this is the first bill under English votes for English laws, stopping Scottish MPs voting – so despite some Tory rebels, it will pass in the Commons easily.

Eventually only real-world consequences can force the government to reconsider. Though housing is a fast-rising public concern, this bill has had too little attention. Though 74% worry about housing themselves or for their children or grandchildren, this demolition of social housing is still below the political radar. Ownership is political dynamite, but social housing gets less traction.

Ask how this government plans to house the many who could never afford full-cost rents and it has no answer. In their magical thinking, if council estates are sold off, the troublesome poorer denizens will melt into thin air.

This bill takes a wrecking ball to the great social housing ideals founded by Octavia Hill and other philanthropists who understood that decent housing is the bedrock of a decent society.”

http://gu.com/p/4te9m

Cutting taxes and giving generous tax breaks doesn’t increase growth

This is what can happen if “growth” is your only objective and these are the solutions being touted by our LEP for our local Growth Point.

“After he became Kansas governor in 2011, Sam Brownback slashed personal income taxes on the promise that the deep cuts would trigger a furious wave of hiring and expansion by businesses.

But the “shot of adrenaline” hasn’t worked as envisioned, and the state budget has been in crisis ever since. Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.

If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.

The governor argued that Kansas had to attract more businesses after a “lost decade” in the early 2000s, when private sector employment declined more than 4 percent.
The predicted job growth from business expansions hasn’t happened, leaving the state persistently short of money. Since November, tax collections have fallen about $81 million, or 1.9 percent below the current forecast’s predictions.
“We’re growing weary,” said Senate President Susan Wagle, a conservative Republican from Wichita. While GOP legislators still support low income taxes, “we’d prefer to see some real solutions coming from the governor’s office,” she said.
Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.
Lawmakers are worried about approving any further reductions in an election year. All 40 Senate seats and 125 House seats are on the ballot in November.
Democrats have long described Brownback’s tax cuts as reckless. Republican critics want to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.
Debate over the next budget will intensify after lawmakers return from a recess later this month. They could follow through on their threat by adjourning without making specific reductions and leaving the governor with the authority to do so. He faces fewer repercussions because he will not appear on the ballot again before leaving office in January 2019.
Brownback rejected earlier calls to scale back the tax cuts and shows no signs of backing down.
He declined to be interviewed about the lawmakers’ unusual demand until new revenue projections are released Wednesday. Spokeswoman Eileen Hawley said the governor will release proposals afterward for balancing the budget, but, “a plan to raise taxes on small businesses or anyone else will not be among them.”
Brownback blames the economic sluggishness — the state ranked 43rd in total personal income growth in 2015 — on slumps in agriculture, energy production and aircraft manufacturing.

http://www.dailymail.co.uk/wires/ap/article-3547141/In-Kansas-lawmakers-lose-patience-governors-tax-cuts.html

Sidmouth: mystery stream contamination – can you help?

“Environment Agency workers are trying to solve the mystery of a contaminated stream in Sidmouth that discharges to the beach.

Whilst staff have said the contamination could be caused by a misconnection at new build properties in the town, a definitive cause is yet to be determined.

Recently the stream seems to contain wipes, and Environment Agency Workers are concerned that the contamination could be affecting bath water quality.

In a bid to solve the mystery, the Environment Agency has posted pictures of their investigative work in the hope that members of the public might have some answers.”

http://www.exeterexpressandecho.co.uk/Mystery-stream-contamination-Sidmouth/story-29136721-detail/story.html

Remind you of anything?

Should anyone find this disgraceful and wish to draw it to the attention of the council’s MP, then write to George Osborne, Chancellor of the Exchequer, in whose constituency this is taking place.

Perhaps he and Hugo Swire could have a little chat about their experiences.

“Councillor Sam Gardener, who was initially the Conservative-run [Cheshire East] council’s deputy cabinet member for finance and assets, resigned after revelations that he failed to disclose that he was barred from being a company director when CEC gave him responsibility for the local authority’s finances in May 2015.

The ban relates to charity donations that failed to reach the intended charity but were transferred into the account of a company in which Mr Gardener was a director. That company subsequently went into liquidation owing creditors £440,000.

You might think it prudent for any prospective cabinet member, let alone one involved in finance, to be closely vetted for any fiscal irregularities but apparently Cheshire East did not.

“I was not obliged under Council rules to disclose the matter of my disqualification as a company director when interviewed for my Cabinet position and the disqualification is in no way incompatible with my duties as a portfolio holder,” said Councillor Gardener.

Mmm… let me consider that for a moment: disqualification from being a company director for financial irregularities is ‘in no way incompatible with my duties as a portfolio holder.’

Councillor Gardener may have had some difficulty selling that to taxpayers (had they known).

So how did CEC react on discovering his disbarment?

“The Council and the residents of Cheshire East have lost the services of a highly talented, sensitive and dynamic young man who has chosen to step down,” said Council Leader Rachel Bailey.

It sounds somewhat reminiscent of the statement made by managing director of the CEC loss-making CoSocius who claimed the company ‘made progress in a number of areas and contributed to the success of other areas.’

(What he didn’t say was that his company somehow managed to lose £800K of taxpayers’ cash in only eleven months trading and notch up a pension deficit of £8.5M.)

Only in Cheshire East could the resignation of a cabinet member disqualified from being a company director for financial irregularities be described as a ‘highly talented, sensitive and dynamic young man.’

Clearly Councillor Bailey was not one of those creditors left with debts of £440K who I suspect would have an altogether different opinion.

I really don’t know what point of reference the CEC leadership uses for evaluating its performance. Undeterred by its mammoth losses at CoSocius they launch two new identical trading companies and describe a disbarred company director as a ‘dynamic young man.’

Residents financing this political circus may use another vocabulary.”

http://www.wilmslow.co.uk/news/article/13509/barlows-beef–another-monumental-blunder-from-cheshire-east

Dorset cuts services and vastly increases managers’ pay ‘because they are worth it’

” … The item was listed as exempt in the staffing committee meeting, meaning press and public could not attend, but minutes published online since reveal that the committee recommended the pay rise for approval.

Heads of service are currently paid between £63,348 and £79,714 per year. The new pay structure would mean heads of service are paid a chief officer salary of £80,500 to £85,000 (Band 4) or £86,500 to £91,000 (Band 3).

Wages for all the heads of services are available in documents publicly available online and research by the Dorset Echo reveals that if all 15 heads of service are given the pay rise to the lowest end of Band 4, the annual cost would be £61,443.62.

A spokesman for the county council confirmed that six heads of service would be eligible for a band three and nine would be eligible for band four.

In the minutes from the meeting, the pay increases are justified by stating that the role has ‘changed significantly’ and there has been a reduction of heads of services over the last 10 years.

But Amanda Brown, Dorchester branch secretary for Unison, said the rise is ‘just not acceptable’. …”

http://www.bournemouthecho.co.uk/news/14436155.Council_cutting_services_gives_managers_a_pay_rise___but_they_deserve_it__says_report/?ref=twt

Where Dorset leads no doubt Devon and Somerset will follow.

Wonder how much our LEP members pay themselves …

“Selling off affordable homes ‘would add £4bn to housing benefit bill'”

Labour says sale of council and housing association property will force poorer people into expensive private rented accommodation

The government’s proposed sell-off of thousands of affordable homes could add more than £4bn to the housing benefit bill over the next 30 years, Labour has claimed. The sum emerged from an opposition analysis of the housing bill, being debated this week in the House of Lords.

The bill calls for the sale of low-rent housing, which the housing charity Shelter has estimated will mean the loss of 19,000 council homes and 66,500 housing association homes.

“If you sell off genuinely affordable homes and don’t replace them, then people on lower incomes will be forced into more expensive private rented accommodation and this will mean higher housing benefit spending to cover the cost,” said John Healey, shadow secretary of state for housing. …”

http://gu.com/p/4te8f

Parish councils don’t need the right to appeal planning decisions says government

“The Government has responded to the petition you signed – “Give parish councils the right to appeal planning decisions.”.

Government responded:

The Government places great importance on community involvement in the planning system. Parish councils have statutory rights to contribute their views in the planning process.

The planning system is centred on community involvement. Communities, including parish councils and individual members of the public, have statutory rights to become involved in the preparation of the Local Plan for their area, through which they can influence development in their area. The local community can also come together to produce a neighbourhood plan, which sets out how the community want to see their own neighbourhood develop. Neighbourhood plans are often initiated by parish councils. Local and neighbourhood plans form the basis for decisions on planning applications.

In addition to input on local plans and neighbourhood plans, which set out the local development strategy, communities are also able to make representations on individual planning applications. Interested parties can raise all the issues that concern them during the planning process, in the knowledge that the decision maker will take their views into account, along with other material considerations, in reaching a decision.

The right of appeal following the refusal of an application is an important part of a planning system which controls the ability of an individual to carry out their development proposals. The existing right of appeal recognises that, in practice, the planning system acts as a control on how an individual may use their land. As a result, the Government believes it is right that an applicant has the option of an impartial appeal against the refusal of planning permission. This existing right of appeal compensates for the removal of the individual’s right to develop.

However, the Government does not believe that a right of appeal against the grant of planning permission for communities, including parish councils, is necessary. The Government considers that communities already have opportunity to guide and inform local planning issues via Local Plans and Neighbourhood Plans, and it would be wrong for them to be able to delay a development at the last minute, through a community right of appeal, when any issues they would raise at that point could have been raised and should have been considered during the earlier planning application process. The Government does not think that the planning system would benefit from the grant of a community right of appeal which would lead to added delay, uncertainty and cost for all those involved.

Department for Communities and Local Government

Click this link to view the response online:

https://petition.parliament.uk/petitions/110489?reveal_response=yes