Month: December 2016

BA Crew Christmas Strikes Suspended

BA Crew Christmas Strikes Suspended

BA Crew Christmas Strikes Suspended
Planned strikes by British Airways cabin crew on Christmas Day and Boxing Day have been suspended, the Unite union has said. Employees were due to walk out in a row over pay and conditions.

The union said 4,500 workers employed on so-called “Mixed Fleet” contracts – who have joined since 2010 – were on lower pay than other staff. Talks at conciliation service Acas have led to a revised offer which will be put to a ballot of union members. The airline said it welcomed the move. Unite general secretary Len McCluskey said: “We now have a new offer from the company which we will put to our members.

The two day strike over Christmas and Boxing Day is now suspended. It will be for our members now to decide if British Airways has done enough to meet their concerns.”

Mr McCluskey told the BBC that “Innocent members of the public always suffer when there’s a dispute. Any dispute is only brought about because there is a failure between management and the industrial relations within that company.”

The union had said earnings for Mixed Fleet staff were advertised between £21,000 and £25,000 but, in reality, started at just over £12,000 plus £3 an hour flying pay.

Unite had earlier said that half of Mixed Fleet staff had taken second jobs to make ends meet. Some had even said they had to sleep in cars between flights, because they could not afford the petrol to get home.

UK Third Quarter GDP Growth Revised up to 0.6%

UK Third Quarter GDP Growth Revised up to 0.6%

UK Third Quarter GDP Growth Revised up to 0.6%
The UK economy grew by 0.6% in the third quarter, according to official figures, faster than previous estimates. Growth for the July-to-September period had originally been estimated at 0.5%.

New data from the Office for National Statistics (ONS) suggested that the business and financial sector was more active than previously estimated. The ONS also said that growth in the third quarter of the year was helped by “robust consumer demand”. However, the ONS trimmed its estimates of growth in the first and second quarter of the year. It now says the economy grew by 0.3% in the first quarter, compared with an earlier figure of 0.4%, and cut its estimate for second-quarter growth to 0.6% from 0.7%.

Ruth Gregory, UK economist at Capital Economics, said the figures suggested that June’s Brexit vote had had little impact on the economy and that growth in the final quarter of the year would be positive.

“The latest set of UK National Accounts leave the economy looking even stronger after the referendum than previously estimated,” she said. “GDP growth in Q3 was revised up from 0.5% to 0.6% and the 0.7% growth rate seen in the second quarter was revised down a touch, to 0.6%, suggesting that the economy didn’t lose any pace following the referendum.”

Further figures from the ONS showed that the UK’s service sector, which accounts for nearly 80% of the economy, grew by 0.3% in October from the month before.

ONS statistician Darren Morgan said: “Robust consumer demand continued to help the UK economy grow steadily in the third quarter of 2016. “Growth was slightly stronger than first thought, though, due to greater output in the financial sector. New figures on services also suggest that growth in that predominant sector of the economy continued into October, helped in large part by another strong showing from the retailers.”

However, separate figures from the ONS showed the UK’s current account deficit rose back towards record levels in the third quarter, with few signs that the fall in the pound in the wake of the Brexit vote has helped to boost exports.

The gap widened to £25.494bn for the period, from a deficit of £22.079bn in the second quarter.

While that was lower than economists had expected, it caused the deficit to rise to 5.2% of GDP from 4.6%. The record percentage level was 6% in 2013.

Home Ownership by 25 Year Olds Halves in 20 years

Home Ownership by 25 Year Olds Halves in 20 years

Home Ownership by 25 Year Olds Halves in 20 years
Home ownership among 25-year-olds has fallen by more than half in 20 years, according to council leaders. A survey carried out for the Local Government Association (LGA) by estate agents Savills showed that just 20% of those under 25 own their own property, compared with 46% two decades ago.

The LGA said social housing was vital to enable families to save for a home. It asks the government to recognise a “renaissance” in house building by councils is needed. The LGA said government needed to tackle the shortage of affordable homes to rent and buy. It says it found that, on average, private renters pay 34% of their household income on rent, while social and affordable renters pay 29%.

Homeowners, however, spend an average of 18% of their household income on their mortgage. But the average size of a deposit to get a mortgage is 62% of annual incomes, or 131% in London.

The LGA survey has been released ahead of a government White Paper on housing supply due to be published in January.

Martin Tett, LGA housing spokesman, said it presented an opportunity to boost housing supply and affordability. “It must recognise that a renaissance in house building by councils will be crucial to helping ensure the mix of homes to rent and buy that are affordable for those people that need them,” he said. “This means powers and funding given to councils to replace sold homes and reinvest in building more of the genuinely affordable homes our communities desperately need.”

The LGA wants more power to tell property developers how many affordable homes to include in a development. In addition, it wants to be able to keep more of the cash raised by selling council houses to reinvest in building new homes. The association also wants an increase in how much councils can borrow to build new homes.

Responding to the LGA survey, a Department for Communities and Local Government spokesman said: “We’ve halted the decline in homeownership, with the number of first-time buyers up nearly 60%, and over 335,000 households helped into homeownership through government-backed schemes since 2010. Our upcoming Housing White Paper will clearly set out how we plan to build the homes this country needs.”

Stamp Duty Land Tax Boosts Tax Receipts

Stamp Duty Land Tax Boosts Tax Receipts

Stamp Duty Land Tax Boosts Tax Receipts
The UK government is on track to raise a record amount of tax from property sales, despite a fall in the number of home sales. Official figures show that £7.7bn has been raised from stamp duty land tax (SDLT) during the first eight months of the 2016-17 financial year. That is 12% more than was raised during the same period the year before.

But this has come despite a 10% drop in the number of homes being sold in the UK. Between April and November this year, 782,000 homes were sold, down from the 868,000 sold in the same eight months of the previous financial year.

Even if that trend continues, the exchequer’s revenue from stamp duty may still exceed the previous record of £10.7bn raised during 2015-16.

The increased tax take reflects two big changes to stamp duty in the past two years, as well as the impact of the continued rise in average house prices, which have gone up by 7% in the past year.

In December 2014, the whole SDLT system was overhauled and new tax rates were brought in. These range from 0% on homes worth £125,000 or less, up to 12% on the top slice of homes worth more than £1.5m. The overall effect of the new system is that stamp duty has been cut for the 95% of buyers who buy homes worth less than £1m, but has been raised for those buying more expensive properties.

Then, in April this year, a SDLT surcharge was brought in for anyone buying a second home. This added a further three percentage points to the rates they would have otherwise paid.

Property commentator Henry Pryor said these changes were now depressing the number of transactions at the top end of the market. And he warned this might eventually feed into the government’s tax take.

“While there has been a direct impact on transactions at the top of the market, there is as yet no evidence to support those who have been calling for the chancellor to rethink the rates applicable to buyers of the most expensive properties,” he said. “But estate agents estimate that more than 40% of SDLT revenue comes from within the M25. Plus the number of all transactions in London was, in August, 39% down on a year ago, so this will inevitably create a hole in the chancellor’s accounts in due course.”

Jonathan Hopper, managing director of Garrington Property Finders, said: “Buy-to-let investors will understandably feel aggrieved at the stamp duty surcharge they now face, but their calls for April’s increase to be reversed are likely to fall on deaf ears.”

Monarch Airline Warns Profits Will Fall

Monarch Airline Warns Profits Will Fall

Monarch Airline Warns Profits Will Fall
UK airline Monarch has warned that its profits will be down by 35% this year, describing the current trading environment as the “toughest ever”. Just months ago there were fears for its future, which were put to rest by a £165m investment boost from its majority shareholder, Greybull Capital.

Monarch said its full-year earnings were expected to fall from £74m to £48m in 2016. But it added it was “well positioned to weather ongoing industry challenges”.

The airline said new bookings for summer 2017 were up by 40% on the year before.

Chief executive Andrew Swaffield said: “The record investment in the business announced in October, enhanced marketing initiatives including our first TV advertising campaign in three years and continuing cost control means Monarch enters 2017 in a strong position.”

The financing from Greybull in October allowed the airline to renew its membership of the Air Travel Organisers’ Licensing (Atol) scheme – the scheme that refunds customers if a travel firm collapses. It also meant the airline could invest in new aircraft.

Greybull Capital is Monarch’s majority shareholder and is also known for its investment in Scunthorpe’s steelworks. It bought a majority stake in Monarch in 2014, with an investment of £125m.

Banks Told to Combat Payment Scams

Banks Told to Combat Payment Scams

Banks Told to Combat Payment Scams
Banks must do more to tackle scams where people are tricked into transferring money to a fraudster, the regulator has said. The Payments Systems Regulator (PSR) was responding to a “super complaint” from consumer group Which?. This complaint highlighted the problem of “push” fraud whereby victims are conned into paying the wrong person.

However, the PSR stopped short of recommending that banks should be forced to compensate customers.

In response, Which? said that banks had been let off the hook, and they would have little incentive to protect account-holders. It had wanted banks to refund consumers in cases where customers accidentally transferred money to a fraudster, similar to the protections provided on credit card transactions. At the moment banks pay up in about a third of such cases. But mostly they do not admit liability, leaving consumers out of pocket. Such transfers work instantly, and cannot be recalled.

In one example highlighted by Which?, Christopher Mills, from York, was tricked into paying a £10,000 house deposit to a fraudster who posed as his estate agent. The bank refused to cover the loss.

“Tens of thousands of people have, combined, lost hundreds of millions of pounds to these scams,” said Hannah Nixon, the PSR’s managing director. “We need a concerted and co-ordinated industry-wide approach to better protect consumers, and we need it to start today.”

The regulator said banks needed to work together to help detect this type of fraud, adding they could do more to identify potentially fraudulent payments.

It is recommending that:
> banks collect more data on such scams, so the industry can publish “robust” statistics
> banks work harder to identify potentially fraudulent payments
> the industry develops best practice standards, so banks follow a common approach in cases of fraud

However Which? accused the regulator of letting banks off the hook. “The outcome for people is unfortunately that they will continue to be scammed out of millions of pounds,” said Alex Neill, managing director of Which? home and legal services. We need to see swift action and not see this kicked into the long grass.”

How to protect yourself against “push” fraud

When you transfer money from your bank account, you are asked to enter three pieces of information: The name of the payee, their account number, and the sort code. However only the last two are cross-checked by the bank. So putting in the correct name is no guarantee that person will get the money.

Financial Fraud Action UK offers the following advice:
> Never disclose security details, such as your PIN or full banking password
> Don’t assume an email, text or phone call is authentic
> Don’t be rushed – a genuine organisation won’t mind waiting
> Listen to your instincts – you know if something doesn’t feel right
> Stay in control – don’t panic and make a decision you’ll regret

The PSR has already proposed a series of improvements, such as “confirmation of payee”, which would enhance payment security. However, such changes are not due to take effect for several years.

IBM Vows to Hire 25,000 Staff

IBM Vows to Hire 25,000 Staff

IBM Vows to Hire 25,000 Staff
Technology giant IBM has promised to hire about 25,000 professionals in the US over the next four years. Writing in USA Today, chief executive Ginni Rometty pledged to spend $1bn (£0.8bn) on training and developing new US employees. She and other A-list tech industry executives are due to meet President-elect Donald Trump later on Wednesday.

The meeting may prove confrontational. On the campaign trail, Mr Trump was highly critical of the industry.

Many tech sector executives supported Mr Trump’s rival, Hillary Clinton. And Mr Trump called for boycotts of firms manufacturing overseas, accused some of tax-dodging and proposed reforming immigration. Many tech companies recruit talent from overseas.

It was unclear from Ms Rometty’s article how many of the new hirings would be offset by reductions among current staff, or how much of an increase the $1bn represents compared with current expenditure.  The senior executives expected to attend Wednesday’s meeting in Trump Tower are expected to include Amazon’s Jeff Bezos, Apple’s Tim Cook, Microsoft chief executive Satya Nadella, Google/Alphabet’s Larry Page, Sheryl Sandberg from Facebook and Tesla founder Elon Musk.

IBM was one of the firms singled out for criticism by Mr Trump on the campaign trail for shifting jobs overseas. But immediately after his election victory, Ms Rometty wrote an open letter to the president-elect, outlining suggestions on how to make it easier to employ US workers.

She is now a member of Mr Trump’s Strategic and Policy Forum, an advisory council focusing on boosting growth and jobs. “We are hiring because the nature of work is evolving – and that is also why so many of these jobs remain hard to fill,” Ms Rometty wrote in USA Today. “As industries from manufacturing to agriculture are reshaped by data science and cloud computing, jobs are being created that demand new skills – which in turn requires new approaches to education, training and recruiting.”

IBM has cut thousands of jobs over the last few years, but remains the US’s largest technology company. Originally established as a manufacturer of computer hardware, the company, also known by the nickname Big Blue, has made a name for itself in artificial intelligence. It is developing quantum computing and sells software, hosting and consulting services.

UK Unemployment Falls Again

UK Unemployment Falls Again

UK Unemployment Falls Again
UK unemployment fell by 16,000 to 1.62 million in the three months to October, according to the Office for National Statistics (ONS). The unemployment rate held steady at 4.8% in the same period. Average weekly earnings excluding bonuses rose by 2.6% in the year to October – slightly higher than the previous month.

The UK has one of the lowest unemployment rates in the European Union.

The number of women in work reached a record high of almost 15 million – an employment rate of nearly 70%, the best since records began in 1971. In total, there were 31.76 million people in work, which was “slightly down on the record set recently”, said ONS senior statistician David Freeman. “The labour market appears to have flattened off in recent months,” he said.

Fewer people also looked for work, leading to a rise in economic inactivity, which measures people without a job who are not seeking or available to work. There were 8.91 million people of working age who were economically inactive – 76,000 higher than in the previous period.

“The combination of the weakest employment data since mid-2015 and the fastest wage gains since June will raise eyebrows, but it probably is not as alarming as it might seem,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.  “The employment data are very erratic and sudden swings, in either direction, are not unusual.”

The Bank of England and other economists have forecast that unemployment is set to rise amid uncertainty over Brexit. “Today’s data provides the clearest evidence yet that the jobs market has started to cool off since the Brexit vote,” said John Hawksworth, chief economist at PwC.

The employment figures are based on the Labour Force Survey, in which the ONS speaks to about 40,000 households once every three months. That is a very large survey, but it still means the figures are not precise.

The ONS is 95% confident that the figure of a 16,000 fall in unemployment is accurate give or take 81,000. That means that the fall in unemployment is not statistically significant.

Union defends Post Office Christmas Strike Action

Union defends Post Office Christmas Strike Action

Union defends Post Office Christmas Strike Action
A union representing Post Office workers has defended a decision to strike in the week before Christmas. Workers will stage five days of strikes from Monday in a dispute over jobs, pensions and branch closures – a move likely to affect those sending presents and cards.

But Dave Ward of the Communication Workers Union said it was “now or never”. “[We have to do this] if we want to make a difference,” he told the BBC. “We already know that the government and the company are going to announce a further tranche of closures in January,” he said on the Today programme.

The Communication Workers Union (CWU) said the walkout would start on Monday 19 December and include Christmas Eve. It will involve thousands of workers from the Crown Post Offices. But the Post Office said despite the walkout it would be “business as usual” with “at least” 97% of its 11,600 branches not involved. Crown Post Offices are the larger branches that are usually located in High Streets.

In April 2016, the Post Office announced plans to transfer up to 61 branches into WH Smith stores over the following year. It said the move was part of a 10-year plan to cut costs and save cash, and would act as a way of “safeguarding the future of the network.”

“Our members want the Post Office management to pause its closure and privatisation programme, hold off on its planned pensions changes, and commit to sitting down with us and with the other key stakeholders of this Great British institution and, together, construct a lasting vision,” said CWU assistant secretary Andy Furey.

The Post Office said it was “extremely disappointed” by the CWU’s action. “Just today, we agreed with the CWU that we would resume talks, which have been ongoing throughout the summer, on Wednesday,” added Kevin Gilliland, the Post Office’s network and sales director.

UK Shoppers Buy Premium Own Label Treats

UK Shoppers Buy Premium Own Label Treats

UK Shoppers Buy Premium Own Label Treats
Sales of supermarkets’ premium own-label brands are booming as shoppers decide to treat themselves. Figures from Kantar Worldpanel for the 12 weeks to 4 December show a 13% sales rise for the products, despite sluggish growth overall for food retailers.

Sales of Morrisons’ The Best range are up 35%, Asda’s Extra Special products have increased sales by 15%, while Aldi’s Specially Selected is up 10%.

Kantar expects premium private label sales to rise further this Christmas.

Fraser McKevitt, head of Kantar’s retail and consumer insight, said 88% of consumers now bought items from premium own-label ranges. “In the past 12 weeks, 6.3% of own-label purchases were from premium lines such as Tesco Finest and Sainsbury’s Taste the Difference – well ahead of the 5.7% recorded last year,” he said.

Aldi was the only retailer to record double-digit sales growth overall, with a 10% rise compared with the same period last year. It also increased its market share to 6.2%. It was followed by Iceland, which posted an 8.6% jump in sales.

In the latest 12-week period, Tesco increased its market share from 28% to 28.3%, while Sainsbury’s fell from 16.7% to 16.5% and Asda slipped from 16.2% to 15.3%.

Mr McKevitt said that shoppers were yet to feel any effect of inflation picking up, with a typical basket of everyday groceries 0.1% cheaper than this time last year.

However, some categories are on the rise, with fresh fish jumping 5.3%, chilled ready meals 2.3% more expensive, and beer up 2.1%.

Prices were still falling overall, and shoppers were spending less on items on special offer than they did this time last year.

“Some 36.9% of spending was on offers during the past 12 weeks, down from nearly 40% in the 12 weeks to December 2015,” Mr McKevitt said.  “Promotional activity has dipped across all five of the biggest retailers, reflecting ongoing efforts to simplify shopping and offer more of an everyday low pricing model, which relies far less heavily on promotions.”