Azure Global : 12/02/13

Monday 2 December 2013

British wage-earners have taken £5,000 pay cut in five years, figures show

Government figures will fuel debate about living standards before 2015 general election

Britain's wage-earners have taken a £5,000 pay cut in the past five years, according to government figures, suggesting ministers will struggle to engender a feelgood factor before the 2015 general election.

The figures published by the Office for National Statistics show wages and salaries for the middle fifth of non-retired households fell from £33,100 in 2007-08 to £28,300 in 2011-12. Over the same period original income, which is the income households get from employment and investments, fell from £37,900 to £32,600, while cash benefits rose from £3,100 to £4,600.

The figures will fuel the debate about living standards before the general election, and about whether the government has done enough to protect the typical wage-earner.

The figures confirm that the earnings squeeze pre-dates the 2007 recession, appearing to endorse Ed Miliband's claim that the link between wages and growth has been broken, one of his chief justifications for his willingness to intervene in the market. The report says: "While GDP per person continued to grow at similar rates between 2004-5 and 2007-8, growth of median household income slowed to a fifth of its previous rate in the years immediately before the start of the economic downturn."

The Treasury will be fervently hoping that it will be able to show the link has been restored in 2014, either because economic growth is so strong or because it has taken steps to make work pay with its welfare reforms.

But the figures also show that despite the big rise in personal allowances due to budget decisions by the Liberal Democrats and the Conservatives, median household income for the overall population has fallen by 3.8%, after adjusting for inflation, since the start of the downturn.

However, while the median income for non-retired households fell by 6.4% between 2007-08 and 2011-12, the median income for retired households grew by 5.1%.

Between 2007-08 and 2011-12, average income from employment and investments for the middle fifth of non-retired households fell from £37,900 to £32,600.

Cash benefits for the middle fifth of non-retired households rose from £3,100 to £4,600 between 2007-08 and 2011-12. As a result, the average proportion of gross income coming from cash benefits increased from 7.6% to 12.3% for this group.

Average direct taxes paid by the middle fifth of non-retired households have fallen from £8,700 in 2007-08 to £6,800 in 2011-12. As a percentage of gross income, this is equivalent to a fall from 21.1% to 18.3%.

Looking over a longer period between 1977 and 2011-12, the middle fifth of households saw an increase in unequivalised gross income from £18,500 to £30,100, after taking inflation into account.

The report confirms the extent to which the reforms have hit middle incomes, but also the way in which the retired have been relatively immunised, confirming there is an issue of inter-generational fairness to be addressed. The retired median household income is still much lower in absolute terms than non-retired income.

The Treasury countered the figures with its own report showing wage growth had followed GDP growth in the previous two recessions. It says that although wages have shrunk, this disguises the extent to which workers have been subsidised by higher company pension contributions or higher national insurance contributions.

The Resolution Foundation, a thinktank that specialises in this policy field, said: "It is striking that there was a pronounced slowing in the growth of median household incomes even before the years of economic downturn. It confirms that between 2004 and 2008 income growth slowed to a fifth of its previous rate, even as GDP growth kept up a consistent pace. This underlines Resolution Foundation work highlighting the major slowdown in wages and incomes that occurred well before the great recession.

"The figures also reveal a dramatic generational difference – with the incomes of working-age households falling by more than 6% since 2008 while those of retired households have continued to rise. The pre-crisis slowdown is likely to have been even starker if we looked only at working-age households."

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook

Energy firms to cut bills after Osborne promises to roll back green levies

British Gas says it will cut average £41 from dual-fuel bills, while Scottish & Southern Energy expects to cut £50

Britain's under-fire energy suppliers have said they will cut household bills after the government confirmed a shakeup of green levies.

British Gas said it would reduce gas and electricity prices by an average of 3.2%, equivalent to £41 from an annual dual-fuel bill, with an extra £12 rebate for the government's warm home discount scheme.

Its rival Scottish & Southern Energy said it expected a saving for the typical dual-fuel customer of around 4% before the end of March, equivalent to a saving of around £50.

The moves come after the chancellor, George Osborne, confirmed that the costs of some energy-efficiency schemes would be rolled back in this week's autumn statement.

Npower said it did not plan to increase energy prices before spring 2015 unless there were increases in wholesale energy costs or network charges.

The cut in British Gas bills comes two weeks after it raised electricity prices by 10.4% and gas tariffs by 8.4%, adding around £123 to the average annual

British Gas's managing director, Chris Weston, said on Monday: "British Gas is pleased to be cutting energy bills by an average of £53 from 1 January.

"We have been able to do this because the government has committed to making changes to the environmental and social obligations that are paid for through energy bills. These changes will now allow us to help more people at a lower cost."

The government is cutting the cost of the energy company obligation (Eco), an insulation scheme delivered by major energy suppliers, in a move that should shave £30-£35 off bills, on average, next year.

The Department of Energy and Climate Change also announced it was establishing a rebate, saving the average customer £12 on their bill for the next two years.

Electricity companies will also take voluntary action to reduce network costs in 2014-15, funding a one-off reduction of around £5 on electricity bills.

The energy and climate change secretary, Ed Davey, said: "Energy bills are a big concern for many people, which is why we've been working to reform the energy market, increase competition and make it easier for people to shop around and switch supplier.

"Today's announcement confirms a serious, workable package which would save households around £50 on average."

UK manufacturing recovery in full swing as new orders boom

PMI rose to 58.4 in November, with new orders at a near-20 year high and thousands of new staff taken on last month

Manufacturers enjoyed a jump in demand that pushed growth to its fastest rate for more than two years and saw the sector take on thousands of new staff last month.

New orders were the strongest for almost 20 years and job creation accelerated, according to the Markit/CIPS UK Manufacturing PMI survey. Encouragingly for the government's push to rebalance the economy, export orders also picked up.

The closely watched report comes as a timely boost to Chancellor George Osborne as he prepares to present his autumn statement plans for growth, spending and taxes on Thursday.

The headline activity index rose to 58.4 in November from an upwardly revised 56.5 in October. That was its eighth month above the 50-mark that separates expansion from contraction and was well ahead of the consensus forecast for 56 in a Reuters poll of economists.

The news sent the pound to a five-year high against a basket of other major currencies as traders bet an accelerating UK recovery would see interest rates rising sooner than the central bank has been suggesting.

Rob Dobson, senior economist at survey compilers Markit commented: "UK manufacturing continued to hit the high notes in November. The Manufacturing PMI struck a fresh two-and-a-half year peak as production and new orders rose at, or close to, 19-year record rates. The sector is on course to beat the 0.9% increase in output seen in the third quarter.

"Sustaining the recovery remains the key and the news here is also positive. The manufacturing expansion remains broad-based by sector, demand from the domestic market continues to surge higher and new export orders are rising at a clip close to October's 32-month high."

As activity and orders picked up, firms took on new staff at the fastest pace for more than two years.

Markit said manufacturers were creating around 5,000 jobs a month across all parts of the sector and all sizes of firms.

James Knightley, economist at ING Financial Markets said the job creation pointed to unemployment falling faster than the Bank of England is predicting. That could see interest rates rising sooner than the central bank has suggested, he said. Policymakers are waiting for unemployment to drop to 7% before they will consider raising borrowing costs from their current record low.

Kinghtley said the job creation suggested in manufacturing report "supports our view that the unemployment rate will drop below 7% late 2014/early 2015". He also highlighted a robust production reading and strong orders from the eurozone.

"Taking it all together it implies that the UK economy is looking in good shape with interest rate rises looking increasingly probable from early 2015," he added.

The survey follows forecasts from manufacturers' organisation EEF that the sector will grow faster than the wider economy next year. The group thinks the sector probably contracted by 0.1% this year but will grow 2.7% next year while UK GDP rises 2.4%. The EEF's latest survey suggested firms are more confident about investing and hiring staff over the next year but they feel the export outlook is still uncertain thanks to problems in some emerging markets and sluggish growth in the key market, the eurozone.

Economists said the manufacturing report marked a strong start to the monthly trio of PMI surveys from the three main sectors. Tuesday sees the release of the construction report while the closely watched survey from Britain's dominant services sector on Wednesday is expected to show that strong growth continued in November.

"If [the manufacturing PMI] is followed by robust construction and, especially services, surveys, it will look very likely that GDP growth in the fourth quarter could at least match the 0.8% quarter-on-quarter expansion seen in the third quarter," said Howard Archer, at IHS Global Insight.

"Much will depend on how well consumer spending performs in the fourth quarter, as there have been some signs that consumers have taken a breather after spending at a robust pace in the third quarter."

Energy and eco-handouts funded by tax avoidance crackdown, says Osborne

Moves to cut energy bills by £50 and energy efficiency grants of £1,000 for homebuyers to come in autumn statement

A fresh crackdown on tax avoidance will fund £1,000 grants for homebuyers to improve energy efficiency, George Osborne has said.

The chancellor said the coalition would keep the public finances under tight control as he gave details of a shake-up of green levies that could see £50 shaved off energy bills.

He said on the BBC's Andrew Marr Show that his autumn statement on Thursday would stick to the task of delivering a "responsible recovery". Despite signs of a sharp upturn in growth, he said there were still "lots of risks" for the economy and increasing borrowing would be "disastrous".

Asked how the energy efficiency grants and cuts to environmental levies on bills would be funded, Osborne replied: "The money will come from additional taxes that we will raise from dealing with tax avoidance."

Danny Alexander, the chief secretary to the Treasury, said he hoped the coalition's proposal would persuade Labour to drop its "barmy idea to con the public" with a 20-month energy bill freeze should it win the 2015 general election.

He said the new measures paid for by "tax dodgers" would also "not sacrifice a single gram of carbon" that the coalition was already aiming to save.

Speaking on Pienaar's Politics on BBC Radio 5 Live, Alexander said: "We are just doing it differently. So, rather than saying that billpayers should pay all these costs for other people to insulate their homes, we're saying instead that tax dodgers should pay that because we're going to use the taxpayer to pick up some of those costs and use that money to give people extra financial incentives.

"So, if you like, we're helping to take money off people's bills through the energy companies and we're paying people to take action to cut their own bills further."

But the shadow chancellor, Ed Balls, claimed the coalition's new energy announcement would not last 24 hours, and said the lack of answers from Nick Clegg and David Cameron made them look "a bit naked today".

He told 5 Live: "I think by Thursday George Osborne will have to come up with something more but this is not going to be good enough."

Balls added: "What's happened today is David Cameron and Nick Clegg, in a rather bizarre joint article in the Sun, have decided they're going to try and engage Ed Miliband on Labour's territory – pointing out the cost of living crisis, the failure of action on energy prices, the fact that most people are worse off not better off compared to 2010.

"But they've raised the issue and they've not got an answer and therefore … I think David Cameron and Nick Clegg both look together a bit naked today."

To laughter, Balls added: "That was not intended to be more than a metaphor."

As part of the package of changes to green levies, the energy company obligation (ECO) scheme will be halved by giving the big six power firms two years longer to hit targets. Other policy charges will be funded from general taxation in future.

EDF welcomed the move – expected to trim average bills by £50 a year – and indicated that it was not now likely to hike prices again before 2015.

In addition, anyone buying a home will be eligible for the £1,000 grant for energy efficiency measures, such as installing insulation or replacing the boiler. The sum could be even higher if the property needs a great deal of work.

Osborne dismissed the idea that energy companies would pocket the reduction in government levies without bringing down bills. "We are absolutely insistent that this is passed on … I am pretty clear with you that it is going to happen," he said.

He refused to give details of the tax avoidance crackdown but said people were wrong to be sceptical about whether such action really raised revenue. "This government has taken step after step and the amount of tax we collect from people who were previously avoiding their tax goes up by billions of pounds over this parliament," he said.

The chancellor attacked Labour's energy price freeze pledge, which has been dominating the political agenda since Miliband announced it in September.

"We are doing it in the way that government can do it, which is controlling the costs that families incur because of government policies," he said. "We are also doing it in the way that is not going to damage the environment or in any way reduce our commitment to dealing with climate change."

He went on: "It is all about providing people with carrots not sticks and I think that is the right way for this country to go green. By taking these additional measures we can afford to help the vast majority of people who do pay their taxes, have expensive electricity and gas bills and therefore want to have relief from the government."

Article Source : http://www.guardian.co.uk
Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook

UK manufacturing sector to grow faster than economy next year

Industry report gives buoyant forecast for UK manufacturing, predicting 2.7% growth compared with 2.4% for economy

Manufacturing will grow faster than the overall UK economy next year but much-needed business from overseas markets is looking shakier, according to an industry report published on Monday.

The buoyant forecast from UK manufacturers' organisation EEF marks a turnaround for a sector the government has repeatedly championed as an engine for growth, but which has struggled to emerge from recession.

News that orders and output are now rising and that UK factories plan to ramp up hiring and investment will be welcomed by George Osborne as he prepares to outline his latest plans to boost the recovery in his autumn statement this week.

But EEF's latest survey with accountants BDO showed exports were weaker than expected in recent months on the back of slower growth from some emerging markets and sluggishness in the eurozone, the UK's most important market.

EEF chief economist Lee Hopley said: "Over the course of the year we have seen a definite turnaround in prospects for manufacturing and this looks set to continue into next year. This increased confidence is evident in companies looking to increase their headcount and, most importantly for balanced growth, step up their investment.

"However, uncertainties in the global economy remain and a sustained recovery is not secure. As a result, growth must remain a priority for government over the remainder of this parliament, starting with the autumn statement this week."

The group, which has 6,000 member companies, says the risk comes from an uncertain export outlook. But it still thinks the sector will grow by 2.7% in 2014 compared with 2.4% for the economy overall. EEF thinks that this year the manufacturing sector will have contracted 0.1% while the wider economy grows 1.4%.

While that still puts that manufacturing sector in recession this year, the prediction marks a significant upgrade from the last estimate of a 0.5% decline. The group said that reflected a run of improving news. Its own quarterly survey showed a majority of firms reporting growth in both output and orders, though these measures slipped back from highs seen over the summer. Within the sector, the strongest results came from motor vehicle and electronics companies.

A separate report on Monday echoes recent optimism about new jobs being created by the private sector. Business lobby group the CBI says medium-sized businesses are helping to drive the recovery but that the government must do more to help them access finance, find skilled workers and get support to export.

Despite accounting for less than 2% of the private sector, medium-sized businesses have created jobs at twice the pace of large companies, the CBI said. They added 185,000 jobs between March 2010 and March 2013, a rise of 4.1%, and now employ 16% of the UK's total workforce.

Medium-sized firms, classed as having 50-499 staff and a turnover of £10m-£100m, have also grown their turnover by 7% – more than double that of smaller firms and large companies. They now contribute more than £300bn to the economy, but the lobby group says government support could boost that significantly.

"This hugely positive picture is reflected up and down the country where medium-sized businesses are major local employers, in many cases helping to offset public sector job losses during the downturn," said CBI director general John Cridland.

"With better access to a range of growth finance options, improved training and research support, and help to break into new export markets – these firms could be worth an extra £20bn to our economy by 2020."