Chancellor George Osborne raised the prospect of regional pay earlier this year, however, a study for the TUC has found that there is "no economic case" for pressing ahead with the divisive measure, claiming there is no evidence that the pay of workers such as teachers, nurses and dinner ladies was preventing local firms from hiring staff.
The report goes on to say that within a worst case scenario where the pay of millions of public servants who live beyond London and the South East is brought down to private sector levels, as many as 110,000 jobs could be lost across England and Wales, and the cost to local economies would be £9.7 billion a year.
The report went on to say that on a best case scenario the introduction of local pay rates for public servants would see the creation of only 11,000 jobs, the report found.
Following the report, the TUC general secretary Brendan Barber said: "Quite apart from the huge hit that public sector workers would have to take in their pockets if pay in parts of the UK is held down to 'allow' the private sector to catch up, this report shows that the move would also prove hugely damaging to local economies.
"Despite the concerns being voiced by MPs in the parts of the UK most likely to be affected by the introduction of local pay rates, the Government has so far refused to rule out this move that would hit public sector workers and their families - who are already feeling the financial pinch as they suffer the effects of a lengthy pay freeze - very hard."
The findings of the report comes ahead of pay review bodies reporting back to the government, later this week, on the effect of introducing regional pay rates.
For more information, please visit www.milsted-langdon.co.uk
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The Bank of England and the Treasury have today (July 13th) unveiled details of the “funding for lending” scheme, which aims to boost lending to businesses and households.
Under the scheme, the Bank of England will make cheaper funds available to banks, equivalent to five percent of the amount they currently lend; and it has been announced that as part of the new scheme, if High Street banks are able to increase the amount they lend to consumers and businesses through loans and mortgages, they will be able to borrow more, with no upper limit.
Following the announcement of the scheme, the Chancellor George Osborne said: “Today's announcement aims to make mortgages and loans cheaper and more easily available, providing welcome support to businesses that want to expand and families aspiring to own their home.”
He added that the initiative would "inject new confidence into our financial system and support the flow of credit to where it is needed in the real economy - showing that we are not powerless to act in the face of the Eurozone debt storm.”
The Funding for Lending scheme is set to begin in August of this year, and will remain open for an eighteen month period.
For more information, please visit www.milsted-langdon.co.uk
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HMRC have issued new guidance to clarify how adviser charging can be applied for personal and group pension schemes; with the new guidance addressing issues raised when the government launched their draft guidance.
Previously, issues had been raised about HMRC’s proposed approach, with fears that it could complicate shopping around at retirement. This is because, under previous plans, if an individual decided to switch provider when they brought an annuity, the tax free cash is paid by their original provider.
As a result, the new provider would have been required to contact the previous provider and request they pay a portion of the adviser charge from the tax free cash to the adviser.
However, the revised guidance now states: “A registered pension scheme might make a payment to a financial adviser for the cost of pension advice that is given to the member by the financial adviser in relation to the pension scheme.
“Such pension advice might be in connection with the suitability of fund choice, asset allocation, pension provider, pension taxation or checking against statutory limits.”
The guidance goes on to say: “Also, the advice could cover how to maximise income from the pension fund at retirement or how to maximise the return on existing pre-retirement pension fund or more general advice on the payment outcomes/risks of respectively choosing the type of pension to be taken; scheme pension, lifetime annuity or drawdown.”
As a result, if an adviser charged £500 for advice on the pension options for a member with a £100,000 fund, a tax-free lump sum of £25,000 will still be available, with the charge taken from the remaining £75,000 after it is passed to the annuity provider.
For more information, please visit www.milsted-langdon.co.uk
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A member of the Bank of England’s Financial Policy Committee has claimed that banks should be forced to more than double the minimum levels of capital they are required to hold to protect against shocks, if they want current regulations to be lightened.
Speaking in London earlier this week, Robert Jenkins floated the idea of a freeze on new banking regulations and a reassessment of the existing rulebook – if banks can raise their tangible equity capital to twenty percent.
Mr Jenkins said the best solution if banks wanted their burden to be lightened would be to make themselves so strong that the worst economic shocks could be handled with relative ease; adding: “Let me suggest a deal – one which I stress is not in my gift and which I propose in my private capacity only.
“How about a moratorium on all new regulation, followed by a review and rollback of the rule book. In exchange, all banks everywhere would be required to raise their tangible equity capital to twenty percent of assets.”
The comments by Mr Jenkins came as the Bank of England's governor, Sir Mervyn King, called for banking reforms to be passed into law as soon as possible to "prevent the plans being watered down".
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It has been revealed that UK manufacturing unexpectedly rose during May, as it was boosted by an additional working day, after the government moved a public holiday to June – and this is said to have provided a boost to the economy.
Latest figures released by the Office for National Statistics have revealed that during May, factory output rose by 1.2 percent compared to April’s figures; whilst the overall industrial output increased by one percent for the same period.
The Office for National Statistics have also revealed within the latest figures, that out of just over a dozen categories in manufacturing, eight rose in May and five declined, compared to the previous month.
Despite the figures providing a welcome boost to the UK economy, the Office for National Statistics have warned that May and June’s figures should be taken with caution, as the government had moved the UK’s annual public holiday at the end of May for the Queen’s Jubilee; and also added an extra holiday in June.
The warning from the Office for National Statistics was also echoed by one economist, who said: “It’s a very good number, but it’s entirely because of the extra day during the month. Underneath it all, it is hard to say what the underlying path of manufacturing is.”
For more information, please visit www.milsted-langdon.co.uk
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