Business

Why those at the top still need a helping hand

E4y.net
4 February 2015Last updated at 00:11

By Katie HopeBusiness reporter, BBC News

Leadership expert Steve Tappin says “the future of the company depends on getting this right”.

Soon after he took the helm at drinks giant Diageo, Paul Walsh played an unusual trick in meetings.

The former chief executive used to pretend that he wasn’t the boss, instead asking others what decision needed to be taken and who was going to take it.

His staff looked at him in amazement, having been under the assumption that he would.

“I’d say, ‘I’m not capable of taking that decision. You know you should be taking that decision.'”

The approach, he explains, was an attempt to cut through “some of the bureaucratic noise” and make sure that people were confident enough to speak up and question things when they had more knowledge than him.

Paul Walsh Paul Walsh looks for people who can make good decisions under pressure

“Sometimes the boss doesn’t have all the right answers and has to modify their position. In the face of compelling evidence that’s what should happen,” he says.

As head of a multinational firm, operating in several different countries and employing thousands of staff, Mr Walsh’s decision to delegate during his 13 years as chief executive seems eminently sensible.

But of course it only works if a firm has the right senior staff in place. Mr Walsh, now chair of catering giant Compass, says he has always looked for people that he thought would make the right decisions when under pressure.

“I expect capability, but I also want character. I consider this notion of a moral compass very, very strongly,” he says.

Leadership expert Steve Tappin says recruiting the right top team is an area many chief executives spend a lot of time on because “the future of the company depends on getting this right”.

Man with sunglassesBosses can find it hard to keep their ego in check

But for chief executives, letting go of the reins when they’ve worked their way to the top isn’t always easy.

After all, to get there in the first place will have required a certain amount of assertiveness and aggression, or even narcissism, not easy characteristics to subdue.

John Mackey, founder and co-chief executive of supermarket chain Whole Foods, likens the seductive dangers of being in charge to the ring of power featured in JRR Tolkien’s fictional trilogy The Lord of the Rings.

“Chief executives have to be able to wear the ring of power and not have this need to be elevated above all else as if they were gods of some kind,” he says.

He admits it’s difficult, particularly for people at the top who will often have others telling them how great they are, and with their usually large salaries helping to boost their sense of self-importance.

Walter Robb and John MackeyWalter Robb (left) and John Mackey share the chief executive role at Whole Foods

Whole Foods has designed both its management structure and its pay to safeguard against these sorts of dangers.

Mr Mackey already shares the top job with Walter Robb, but the two of them are also part of seven member executive team. These senior staff all receive exactly the same salary, bonus and stock options as the two chief executives, and their salaries are capped at 19 times the average pay of a full-time worker.

Changes in how the firm is run are only made if the whole group agrees on them.

“Walter and I may be the leaders of that group but we all are working together,” he says.

Granny holding a pie“Building grandma’s house” is how Joe Plumeri describes his way of motivating staff

But this teamwork only works if all the team members understand exactly what they’re working towards.

Joe Plumeri, the former chief executive and chairman of global insurance broker Willis, describes it as “building grandma’s house”.

In his 12 years at the head of Willis, he successfully returned it from private to public ownership and led its $2.1bn purchase of Hilb Rogal & Hobbs, one of the largest insurance brokerage deals of the last decade.

But when the American arrived as chief executive with his new ideas for the business, it proved a bit of a culture shock for the staff at the 200-year-old British company.

He said people looked at him as if The Fonz, the character in the US sitcom Happy Days, had turned up to lead the firm.

“I had a dream of a different company and a different era that wasn’t the one that insured the Titanic,” he says.

Joe Plumeri and The FonzJoe Plumeri (left) and The Fonz

To get people to see his view for the firm’s future, he used his “grandma’s house” trick, which he likens to parents who build an exciting picture of ice cream, toys and cake in order to keep their children entertained on long car journeys, for example to see their grandparents.

“You’ve got to be able to paint a picture of a vision of where a company is going that is better than where they are now and the reason you do that is to get them to endure the trip because when they come to work every day they’re going to have to do things that are different.

“They’ll do all of that as long as they know where grandma’s house is,” he says.

This feature is based on interviews by leadership expert Steve Tappin for the BBC’s CEO Guru series, produced by Neil Koenig.

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VIDEO: Teams matter when you’re at the top

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Running an organisation that employs hundreds of thousands of people is a daunting task, and one which chief executives cannot manage alone.

But for bosses, choosing the right individuals to support them can be difficult.

Leadership expert Steve Tappin examines how those at the top go about finding the right senior team.

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Boris Johnson enters Boots tax row

E4y.net
3 February 2015Last updated at 23:24

Boris JohnsonMr Johnson said the Boots boss was defending the interests of shareholders

Boris Johnson has weighed into the row about the amount of tax paid by Boots and its chief executive in the UK.

The mayor of London said it was “disappointing” Stefano Pessina did not pay tax in Britain and that the retailer had moved its headquarters to Switzerland for tax purposes.

Ed Miliband has attacked Mr Pessina as a “tax exile” after he warned a Labour government would be a “catastrophe”.

Boots said its total tax bill in 2013-14 was about £550m.

Labour has suggested there is an “unholy alliance” between some business people and the Conservative Party to resist change in the run-up to May’s election and has vowed to take on “powerful forces” over the amount of tax paid by multinationals, as well as on wider issues of taxation and regulation.

Mr Pessina, who took over the retailer when it merged with Universal Unichem in 2007, has suggested Labour policies in such areas would be “unhelpful for the country”.

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Ed Miliband arriving at an event in Milton KeynesMr Miliband has urged more responsibility from “people at the top”

Analysis by 5 live chief political correspondent John Pienaar

It is hard to imagine Gordon Brown, and still harder Tony Blair, picking a fight with business leaders like the chief executive of Boots.

But Ed Miliband is less keen to claim British business as a prized convert to the Labour cause; much keener to gain credit – and votes – for taking on powerful interests.

Read John’s full article

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This prompted an angry response from the Labour leader, who said a “tax exile in Monaco” should not “lecture” people on how to vote in May’s election and Mr Pessina “ought to pay his taxes” in the UK.

Mr Johnson told LBC Radio that Mr Pessina was “perfectly entitled” to express his view on the business landscape in the UK and it was “refreshing” that businessmen did not feel cowed from speaking up so close to an election.

Mr Johnson, who is hoping to return to Parliament as a Conservative MP in May, said it was “absolutely true” that Labour had “no interest” in wealth creation.

Boots storeBoots’ parent firm recently merged with the US business Walgreens

But he said that it was “slightly disappointing” that Boots had moved its headquarters from Nottingham to Switzerland in 2008, a move experts have said is saving the firm millions of pounds every year.

“He is doing his best by the lights of his shareholders and the interests of the company,” Mr Johnson said.

“These guys, I’m afraid, have a fiduciary duty to their shareholders to minimise their obligations. In business terms, it’s what you have to do.

“I have to say I find it a little bit disappointing that he doesn’t cough up for Britain … I think it is a good thing if companies that earn great sums in Britain should pay their taxes in Britain.”

‘Business backbone’

Responding to Mr Johnson’s comments, Labour challenged David Cameron and George Osborne to “join the criticism of tax avoidance by the Boots chief”.

Mr Cameron told BBC Radio London he could “very much agree” with Mr Johnson.

“I’m very clear that I want every company to be headquartered in Britain and I want everybody working in those companies to live in Britain,” he said.

“The good news is lots of companies are choosing to headquarter in Britain and we will go on encouraging them to do so, and so I can very much agree with what Boris has said.”

Speaking on BBC Newsnight, Simon Woodroffe, who founded the Yo! Sushi restaurant chain, said the Labour Party’s approach to business “scares” him.

Mr Woodroffe appeared in a 2004 Labour party political broadcast but has since donated to Conservative MP Oliver Letwin.

He said: “What I worry about with Ed Miliband is that he is appealing to the popular by saying ‘look at these fat cats’.

“What I want our leader to say is ‘we want enormous profits, and yes we are going to share them out later, but first of all we’ve got to make it’.”

Speaking on the same programme, shadow chancellor Ed Balls dismissed Mr Pessina’s criticism of his party.

He said some business leaders supported the Conservatives, some backed Labour, and “most business people are in the centre ground”.

Mr Balls referred to Mr Pessina’s decision to move to Monaco but said “of course business leaders should have a view”.

Lord Rose, who headed M&S for a decade and is now a Conservative peer in the House of Lords, defended Mr Pessina’s right to intervene in a political debate.

Former M&S boss Lord RoseStuart Rose said business was the “backbone” of the economy

“As a man responsible for 70,000 workers – that’s 70,000 livelihoods supporting 70,000 families – Mr Pessina was perfectly entitled to speak out,” he told the Daily Mail.

“What happens in Westminster has a direct impact on his employees and his customers.”

He added: “In a healthy, thriving democracy, people must be free to speak out without fear or favour,” he added.

“This is the real face of British business. They aren’t the enemy. They are the backbone of our economy – and they deserve the support and respect of our politicians.”

Sir Ian Cheshire, the former boss of B&Q, said politicians should refrain from “unattractive” personal attacks even if they disagreed with others’ point of view.

“He has the complete right to have his say, as have other people,” he told the Daily Telegraph. “Even if you disagree with him, I don’t think it is necessary to have personal attacks on Stefano in this way – particularly for a guy who has really ploughed a lot of money into the UK and is doing now to make Boots a world force.”

Sir Ian, who stepped down as head of Kingfisher last year, was recently named as the government’s top non-executive director, advising departments across a range of issues.

‘Stung’

Conservative backbencher John Redwood suggested the row risked damaging Boots’ reputation as well as Labour’s and business leaders needed to think carefully before wading into political controversies in the name of their companies.

“By all means let’s hear from Mr Pessina as an individual with his anti-Labour views, but let’s hear less from Boots,” he wrote on his blog.

“Labour now sees it as an opportunity to put the boot into Boots, as they are stung by the criticism. Neither Labour nor Boots will gain from these rows.”

Alliance Boots, which merged with US firm Walgreens last year, said it paid £90m alone in UK corporation tax in 2013-14, an 40% increase on the year before.

“Overall, the total amount of tax paid in the UK, including business rates, national insurance and corporation tax, was around £550m in 2013/14,” it said.

During that period, the firm made a £830m profit on sales of £6.3bn.

In a statement, it added: “Over the last eight years, and under Mr Pessina’s leadership, Alliance Boots contributed over £1.2bn to its pension funds, benefitting many of the 70,000 people it continues to employ in the UK, and invested a similar amount in transforming Boots stores across the UK.”

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Disney boosted by Frozen toy sales

E4y.net
3 February 2015Last updated at 23:20

Frozen animation The success of 2013’s box office hit Frozen is continuing to boost Disney’s earnings

Entertainment giant Walt Disney has credited the continuing success of toys based on its hit film Frozen and an increase in visitors to its theme parks for an “incredibly strong quarter”.

Net income rose 19% to $2.2bn (£1.5bn) in the quarter, with revenues up 9% to $13.4bn, both better than forecast.

Frozen toys sold particularly well, helping its consumer products division to report a 22% rise in sales.

“This was yet another incredibly strong quarter for our company,” it said.

The company also reported a 9% rise in sales at its theme parks and resorts for the three months to the end of December, despite fears over a measles outbreak at Disney’s Southern California parks in December.

Chief executive Robert Iger told CNBC that the outbreak had had no impact on attendance and that visitors were up compared to the same quarter last year.

However, sales in its studio entertainment division fell 2%. Disney said the fall reflected the weaker performance of its Big Hero 6 film compared to Frozen’s strong performance in the same quarter a year ago.

Disney’s shares, which have already risen 30% over the past year, rose a further 4.4% to $98.23 in after hours trading.

“Our results once again reflect the strength of our brands and high quality content,” said Mr Iger.

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Greece lobbies EU leaders over debt

E4y.net
3 February 2015Last updated at 21:46

Greek Finance Minister Yanis Varoufakis. Photo: 30 January 2015Yanis Varoufakis has repeatedly stressed his refusal to work with the “troika” overseeing Greek debt

Greece’s leaders have received a guarded welcome to their reported proposals for a debt deal, ahead of crunch talks with EU creditors.

After a meeting in Rome with Greek PM Alexis Tsipras, Italian PM Matteo Renzi said his country would “give Greece a hand” without always agreeing with it.

Greek Finance Minister Yanis Varoufakis has reportedly suggested a new deal for exchanging debt with bailout creditors.

The radical left Greek government was elected on a pledge to end austerity.

The Syriza party, led by Mr Tsipras, won last Sunday’s vote by promising to write off half the country’s massive debt, sparking alarm on the markets and among eurozone officials.

The Greek government also said it would refuse new loans from the EU and the IMF, prompting questions about how it would finance itself.

This week, however, Greek leaders on a tour of European capitals sought to allay some of the concerns.

According to the Financial Times newspaper, Mr Varoufakis has retreated from the idea of writing off debt, instead suggesting that it could be exchanged for bonds that would be repaid only if the Greek economy grew.

Matteo Renzi and Alex TsiprasIn Rome, Mr Renzi presented Mr Tsipras – noted for his informal attire – with an Italian tie

The president of the European Commission, Jean-Claude Juncker, has said the bloc will “have to adapt a certain number of policies” to accommodate Greece.

Mr Tsipras meets Mr Juncker in Brussels on Tuesday. He will also travel to France to meet President Francois Hollande, whose government has also suggested a softer line on Greece.

At the meeting with Mr Renzi in Rome on Tuesday, Mr Tsipras said Europe had to “put social cohesion and growth before the policies of poverty and insecurity”.

Mr Renzi echoed him, saying that the world was “calling on Europe to invest in growth, not austerity”.

However, he did not comment on the details of Greece’s proposals.

Despite the conciliatory remarks, many hurdles remain.

“Varoufakis is intelligent, but he is underestimating the problems,” a eurozone official quoted by the Reuters news agency said.

‘Ending the addiction’

Greece still has a debt of €315bn – about 175% of GDP – despite some creditors writing down debts in a renegotiation in 2012.

German Chancellor Angela Merkel has ruled out debt cancellation, saying creditors had already made concessions.

This week, Mr Varoufakis said that he wanted a new plan for fiscal stimulus in place by the end of May, with repayment of existing debt tied to Greece’s ability to restore growth.

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Greek couple look at adverts for rental properties

Greek economy in numbers

  • Average wage is €600 (£450: $690) a month
  • Unemployment is at 25%, with youth unemployment almost 50%
  • Economy has shrunk by 25% since the start of the eurozone crisis
  • Country’s debt is 175% of GDP
  • Borrowed €240bn (£188bn) from the EU, the ECB and the IMF
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Mr Varoufakis added that he would negotiate separately with the European Commission, the IMF and the European Central Bank but not with officials representing all three – the so-called “troika”, which he described as a “committee of technocrats”.

The troika agreed a €240bn (£179bn; $270bn) bailout with the previous Greek government.

Austerity measures imposed in an effort to manage the debt prompted outrage in Greece and led voters to reject the previous government.

Instead, Greeks voted Syriza into power after an election campaign dominated by the party’s message of change.

In interviews in the German media published on Saturday, Mrs Merkel said she still wanted Greece to stay in the eurozone but did not “envisage fresh debt cancellation”.

Greece’s current programme of loans ends on 28 February. A final bailout tranche of €7.2bn was still to be negotiated but the new government has already begun to roll back austerity measures.

Graphic showing how much Greece owes to whom
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New Co-Op Chairman To Donate Pay To Charity

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By Mark Kleinman, City Editor

The businessman being lined up as the Co-operative Group’s first independent chairman is to donate his six-figure pay package to charitable causes linked to the mutual.

Sky News has learnt that Allan Leighton is expected to declare his intention to give away his salary if he is confirmed in the role as expected in the coming days.

The gesture, which has yet to be formally agreed, would reflect Mr Leighton’s commitment to the role, according to insiders.

Another option said to have been raised by board members was to pay Mr Leighton a token annual salary of £1.

Discussions about his appointment are understood to have been held by Co-op board members on Tuesday, with the group keen to finalise his appointment as soon as possible, a source added.

If Mr Leighton does take the role, it would represent a major coup for the UK’s biggest mutual as it strives to rebuild its reputation after two years of crisis.

The size of the salary which Mr Leighton would accept on a nominal basis was unclear but is understood to run to six figures.

Allan Leighton

Sky News revealed on Monday that he was in pole position to take the role, with board members attracted to his track record at running organisations with large numbers of employees and reputation for shaking up troubled institutions.

A former chief executive of Asda, Mr Leighton became a prominent figure during talks over the future of Royal Mail during a stint as its chairman several years ahead of the postal operator’s privatisation.

His current roles include the chairmanships of Entertainment One, the media group, the set-top box manufacturer Pace and the retail chain Matalan.

Joining the Co-op would represent an important personal step for Mr Leighton, who has frequently cited his father’s career as a Co-op store manager in media interviews during recent years.

During his time at Royal Mail, Mr Leighton advocated transforming the business into a mutually owned organisation, and he is understood to have sought a number of assurances about potential reforms at the Co-op during talks with board members.

The Co-op has been seeking a new chairman to succeed Ursula Lidbetter, who took on the role temporarily last year, for several months.

The group was left reeling in 2013 when it emerged that its banking arm was facing a £1.5bn black hole as it tried to acquire more than 630 branches from Lloyds Banking Group.

The Co-op Bank’s chairman, Paul Flowers, was subsequently exposed by a tabloid newspaper as a serial drug-user, plunging the Co-op name deeper into crisis even as it surrendered control of the high street lender to American hedge funds.

Separate independent inquiries led by Lord Myners, the former City Minister, and Sir Christopher Kelly, a former civil servant, concluded that there was a need for an urgent overhaul of the Co-op’s governance, board structure and array of commercial activities.

There was further turmoil at the top last year when Euan Sutherland quit as the group’s chief executive after details of his pay package were leaked to the media.

Mr Sutherland was replaced by Richard Pennycook, a former director of Wm Morrison, the supermarket chain.

Since then, Co-op members have voted to approve reforms including reducing the number of lay directors on its board and the appointment of a majority of independent directors.

Last year, the Co-op Group – which boasts annual turnover of £11bn from businesses ranging from food retailing to funeral-care – returned to the black following a £2.5bn loss in 2013.

The group’s seven million members will have the opportunity to vote this year on whether it should end decades of financial support for the Labour Party.

A Co-op spokeswoman declined to comment on Tuesday.

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Are we missing the real student loan story?

E4y.net
3 February 2015Last updated at 20:23

Bank of Mum and Dad

When Labour finally shows its hand on tuition fees in England’s universities it’s going to be one of the biggest calls of the election campaign.

Whether Ed Miliband sticks with £9,000 or goes for a cut to £6,000 or a switch to a graduate tax it’s going to trigger a blizzard of stories about student debt.

But are we missing something much more pressing?

The hard cash question for many students and their families is about weekly living costs and the amount they can borrow to pay for it.

“Maintenance loan” isn’t such a snappy phrase on a protest banner, but it’s causing real headaches, even though it’s not really on the political radar.

To cover rent, food, travel and any other living costs, students can borrow up to £5,555 outside London and £7,751 for students in London.

Not to beat about the bush, it’s not going to be enough, and the assumption is that parents will contribute the rest.

Cash-strapped parents

But parents might not have enough money either. A survey from financial data firm Experian in the autumn showed many parents have to find an extra £5,000 per year – and many are struggling. Many families don’t have much spare disposable income.

And unlike the deferred debt of the tuition fee, the costs of rent, food, books and travel have to be paid in upfront cash.

When the BBC reported on such concerns there was a deluge of emails from families, already financially stretched, worried about this unexpected cost.

There are grants – but they don’t stretch far up the income levels. If parents’ combined incomes reach more than £42,600 the amount of grant on offer is zero.

For the purposes of student grants, two parents earning £21,300 each per year would be treated as being in the super-rich bracket and their children get nothing.

And that means many students have to depend on the loan, supplemented by what their parents can afford or they can raise from jobs alongside their studying.

But why isn’t there much of a fuss over this?

More debt

It must partly be that there’s no real voice for parents in this debate. There is no National Union of Parents to complain that very moderate earners – the squeezed middle – are lumped in with the highly paid.

And student leaders have staked their campaign so much on £9,000 fees that it feels sometimes as if they’ve looked the other way on living costs.

There’s also the politics.

Allowing a more realistic level of borrowing would mean pushing up the overall debt level. The remorseless maths of headlines would add the tuition fee to higher loans to come up with a terrifying total.

It might be more honest, but it wouldn’t be the message that politicians would want to send.

Tuition feesStudents protested over tuition fees, but the more immediate cash question can be living costs

Coincidentally, when the sky-high annual costs of US universities are quoted, these figures usually include food and accommodation as well as tuition fees.

And if you’re bashing the government for charging too much in fees, it’s a complex argument that another form of student debt should be increased at the same time.

It would also be more expensive for the government, as they would have even more long-term lending to students.

Dropping out

But that in turn raises another point. The big spending on student finance doesn’t actually go to students. The £9,000 tuition fee, underwritten by the government, is paid direct to the universities.

The biggest warning on the lack of funding for living costs has come from university chiefs.

In defence of keeping tuition fees at £9,000, Universities UK this week argued that the focus should not be on reducing fees, but in raising maintenance support.

“A better way of supporting students, especially those from poorer backgrounds, would be for the government to provide greater financial support for living costs,” a group of vice chancellors wrote to The Times

Nick Hillman, director of the Higher Education Policy Institute, cautions that the current loan system is relatively generous compared with many other countries, where many more students might live at home.

“It’s the cost of having a national higher education system in which people typically move away from home to study,” he says.

But the intense focus on the £9,000 paid to universities means that the amount students actually have to live on rarely gets discussed. And the underlying issues rarely get debated.

Should students, who are all legally adults, be treated as being dependent on their parents’ support? Should they be the financial responsibility of parents? And what happens if parents can’t or won’t pay?

And how was the balance reached that it costs £9,000 a year to teach a student and £5,555 for their living costs?

According to the National Union of Students, financial difficulty is the “number one reason that students drop out of education”.

“Those who do not have the rare luxury of resorting to the ‘bank of mum and dad’ are increasingly being driven to work full-time alongside study where jobs can be found.

“Or worse still they go into the arms of predatory pay day lenders just to make ends meet.” says a spokeswoman for the National Union of Students.

“We urgently need a financial support system that ensures students get what the support they need, when they need it.”

Send us your experiences on the form below

I dropped out of university after the first term as I found it too much of a struggle. My parents income is just over the cut-off point for a grant/extra loan so I was left with the basic maintenance loan. Because of this, I chose the cheapest and most basic university halls (Roughly £100 per week) and still found the loan didn’t even cover this- let alone the cost of books, food and going out. I managed to find a job within the first two weeks which was lucky but this also became a problem as I found it difficult to juggle lectures, reading and assignments and the social aspects of university with having a job. My family are comfortable but by no means rich and I feel it’s an unfair burden for my parents to have no choice but to support me after I’ve moved away from home. I have a strong work ethic and would have wanted to get a job whilst at university anyway, but I felt obliged to get a job as soon as possible before I had settled in and to take any hours and shifts available as I needed the money to pay for basic living costs.

Charlotte, Sutton

Finally, someone is highlighting this issue! Fortunately my kids are still in school, so when I found this out started saving a bit each month to help when the time comes, as the university my son wants to go to has hall fees hire than then annual loan. I have pointed this out to friends who were unaware of how small the living allowance loan is. My brother had his two eldest sons at university at the same time for a year and really struggled.

Vicky, Surrey

This article is so, so, so true. At last someone has realised that it is parents who are actually the ones financing tertiary education. I am reaching retirement age and my husband is beyond normal retirement age yet we are still having to finance our University-student children from our net income, which hasn’t seen a salary rise in 5 years. My son still has to have a part-time job to make ends meet. Its time that politicians started to tell the truth about student finance

Kim, UK

If the government really are interested in increasing social mobility then this needs addressing now. Higher education is rapidly becoming a luxury and it only gets worse beyond a first degree. Without his grandad my eldest wouldn’t be able to carry on studying because I can’t help him. Who cares how talented you are – if you can’t eat you can’t study.

Rachel, Abingdon

This is exactly what I have been saying to anyone that will listen (and that isn’t anybody really….). My husband and I both work and have a joint income of around £44,000 – better than many people I know but not exactly in the ‘super rich’ bracket. Our son has a maintenance loan but no grant as it is expected that we will pick up the slack – despite him being an adult. It seems the government have an elastic definition of adulthood – we are no longer eligible for child benefit but he appears to be classed as a child for the purposes of his student finances. We will, of course, support him as much as we can but we do resent the assumption that we will do this. There must be lots of students whose parents won’t or can’t support them and they will not be able to survive on their loans – not when they have to pay at least £100 per week just for accommodation (another scandal in the long line of higher education scandals). It seems to be acceptable to rip off our young people who are trying to better themselves – how long before higher education becomes an elite privilege?

Julie, Redditch

Thank goodness, someone at last talking about this issue. It has been like the emperors new clothes friends look at me as if I am talking a foreign language when I mention this, My husband and I have enough private pension to prevent both children receiving the extra maintenance. However, we cant help them as when we set our pension goal, we didn’t even know about this extra maintenance that we would need to find, god only know why!! They are either financially responsible for themselves or not, the government seems to be selective. My daughters halls are nearly £6,000 in Bristol and she is doing a 5 year course. Do the math as to how much debt she will have…. This is a pivotal election promise for me

Tracey, St Ives

Fantastic! At last this area has been highlighted. My son graduated last year, I have a daughter at uni in London and another wishing to go to uni next year. My children have not been entitled to any grant so we have been contributing to living costs every month. Rent deposits have to be paid sometime in advance (long before the student loan comes), and in London the amount of money required is vast. Rent also has to be paid over the summer holiday so my daughter has to find a job to pay this as we are unable to do so. Her flat mates get grants and are much better off financially than her, as we are unable to match their income. Contrary to popular belief students do not squander all their Student Loan on drink, in my experience they can rarely afford to go out drinking.We have also found that student halls not only require a deposit some 6 months before taking up a place at uni but often require a term’s rent before the Student Loan gets paid in each term. We have often wondered if anyone in Government has realised what a hash has been made of the whole system.

Caroline, Norwich

My Son wanted to be a Doctor from a very young age, (we come from a very modest background I was a Midwife, my Husband a Police Officer)… As I was 3 years off early retirement as a Midwife and my Husband retiring from the Police we had no choice only to take early retirement in order to use our lump sum to pay for fees. He has a maintenance loan but this is not enough for him to live off, we supplement this £200 per month. I have taken a part time job as too my Husband in order to help our financial situation. Tom will leave university to start his career as a Doctor with huge debts in order to be a public servant, in fact he wants to be a GP… He is totally focused on a career as a GP in the NHS and what have Politicians done for him, saddled him with massive debts for his future. He is also aware of our sacrifice for him, ( which we do gladly) but frustrated with ‘the system’. He would not have had thus opportunity if we hadn’t paid, what hope for other would be Doctors from ‘ normal’ ‘modest’ backgrounds.

Barbara, Northants

The poorest of the poor will receive everything, and the richest of the rich don’t need to worry. What gets me is that an average citizen who works everyday and pays taxes etc receives little to no support. It almost makes me wish my parents didn’t work, How wrong is that!?

Jonathan, Carmarthen

For those who can’t go to family for help to pay for things then It means that you maybe have £15 a week to live off… Even working as many hours as you can get which in the current climate honestly isn’t much… You struggle… I think the government need to increase the grant – not the loans.. We do not need more debt to end up with… Increase the level that you can get the grant at. Just because parents are earning over a certain amount each year doesn’t mean they have any spare cash.. £40,000 doesn’t go as far as it used to… And for those who’s parents earn even less… By the time we have paid for rent.. You are lucky to have much money at all…

Adelaide, Plymouth

I’m receiving £3,500 for this year from Student Finance England. This leaves me £600 short for my rent for the whole year, leaving no room for other living expenses. This has led to my parents having to pay my rent for the year, as well as helping out with bills. If my parents weren’t willing to help me out, it would be impossible for me to live at uni due to the lack of funding I receive.

Grace, Lancaster

When I applied for university I couldn’t wait to move out, i was so excited, on the maintenance loan application it asked about my household income then when i got an offer it was £1000 less than the cheapest accommodation so they expected my parents or me to find over £1000 so that i could afford to move out and live in Manchester, my parents couldn’t afford this money as it is a lot! So I stayed at home and commuted back and forth but after a few months I couldn’t keep affording the travel costs and the costs of the supplies I needed like books and the cost of packed lunches or food while I was there so I left because I felt like this was my only option. It’s stupid that the money we get for living on our own independently is based on parents’ income, not all parents can afford this money and they shouldn’t have to pay it. If we’re moving out then we should not be seen as dependent on out parents.

Kate, St Helens

Sean’s article highlights something I am becoming increasingly alarmed at. With two children who might both be at university within the next three years, I just can’t see how their costs of living will be met. As Sean points out, the maximum student loan will not cover even the most squalid standard of unhealthy living. Many parents of 20+ year olds are desperately trying to sort out their own pensions and pay off their own debts as they near retirement rather than financially support their adult children. What is the point of a university education? If it is so the UK can enjoy a better economy, then the economy needs to borrow the money to pay for students to survive higher education. Alternatively, perhaps parents should provide a loan to cover the additional costs of higher education, but then are paid back, with interest, by the future employers of our children who will benefit so much from these university educated people.

Ricky, Oldham

I have a son who only gets the non means tested loan of approximately £3575 per year. I have two other children at home but am expected to pay the rest of his costs, his loan doesn’t even cover his rent! According to the government I can afford this but they don’t taken into account rent or mortgages that parents pay when assessing your household income you can only spend this money once! If you receive housing benefit they do not count this as income as it is not taxable. Really? Another dig at middle income families!

Samantha, Exeter

I was pleased to read your article highlighting the problem of living costs for students. I am a single parent on a good (but not huge) salary and I constantly at the end of term have to supplement my son’s living costs. He gets a maintenance grant but as my income goes up with pay raises each year, his maintenance grant goes down. Next year he will barely get anything at all. His maintenance grant this year only just sustains his rent, electricity, gas, food etc., and I pay for his telephone and internet. He is lucky that he has a part time job to supplement his grant but if it wasn’t for me supplementing additional income he would have to leave education. He shares a house and the landlord has six students in the house and is raking in rental fees. I struggle to provide the extra income for him as I have my own living costs to manage. I believe this should be addressed by the parties, it’s not all about the tuition costs.

Stacey, Newmarket

My son is only allowed a maintenance loan of £3,300 (because of our joint income) plus £9,000 tuition fees. His accommodation costs for the year in catered Halls of Residence in Brighton are £6,123 which means we have to pay £2823 towards accommodation plus we give him a further £200 a month to live on as catered is only Mon-Fri and the hall of residence are a bus ride from the Uni which costs up to £15 a week. He is on a graphic design course so there are material costs and the students have to raise a minimum of £500 each towards the cost of their final degree show in London. Yes, the parental subsidy is invisible but huge and is making life very difficult for many parents like us on modest incomes. We also have a daughter doing an Msc to improve her chances of a job, and as there are no post graduate loans anymore she had to rely on the generosity of other family members and her own savings from working last year to pay. Again we pay her maintenance costs for accommodation (£250 a month) and living of £100 every month although she has got a part-time job which helps a little. I know parents who have had to take out personal loans to support their children at Uni. If we weren’t in fairly decent jobs, then we’d be in debt too. We’ve long advocated a Graduate Tax and the sooner the politicians have the balls to introduce it the better and it should apply to everyone who has a degree. I would willingly pay extra income tax to stop all these problems. After all, I got my degree for free. Hope this is useful. Thanks.

Jan, Kenilworth

My wife and I have both worked all our lives, I have a police pension but have to work pretty much full time still to just live comfortably. Therefore, my daughters grant is pitiful, we’d be better off in lesser paid jobs or not working at all. Now, if you also take into account that my daughter is also a non-drinker or smoker and lives a pretty frugal existence, it doesn’t seem fair that she has not even got enough to pay the food bills every week. I see other parents with money squirreled away here and there and their kids get massive grants, it kind of makes you wonder why we bother being so honest and declaring all our earnings as my daughter suffers because of it. There is something seriously wrong in the system that punishes hard work and an 18 year olds ambition to acquire a good education.

Kellingley, Surrey

It’s a joke, i get £2500 a year maintenance loan and my rent’s about £4000. How is this possibly fair? The students coming from poorer families or single parents are often the better off at Uni as they get higher loan and additional grants. I’ve had to work throughout university and that has probably jeopardised what my final result will be.

Ted, Manchester

Good to see this debate opened up. One aspect that I’d like to see investigated is exactly what the universities are doing with the £9k / year / student. Certainly centrally allocated per-student funding was far lower than this before the fees were introduced? And £9k per student, no matter what course you’re doing? Very strange.

AJS, Bristol

Watching two children from a limited income, single parent family struggle desperately to achieve their dreams, both of which required a University degree, I feel this is a massive point. The stress of completing the work required (in my daughters case a joint honours degree in Music and Drama and a PGCE course), combined with working tirelessly during holiday periods to raise enough money to survive the next terms living costs was heart-breaking. The only support I was able to provide, especially for my daughter was to ensure they started each term with enough basic essentials. They have both made me extremely proud, the first from both sides of the family to go to University; however additional support would have made all of our lives unbelievably less stressful. Another issue not discussed enough in my opinion is the Interest incurred on the loans; to receive statements showing you owe up to £30,000 is worrying enough, but to view the interest incurred is even more disheartening. Extremely well done for raising this valid point for discussion/debate, thank you.

Jackie, Oakham

My parents together earn more than £42,600 which means my maintenance loan has ended up being around the minimum of £3575 a year. This did not even cover my halls accommodation during first year… The short of it is, it isn’t fair for the goverment to work out these maintenance loans and grants based on parents earnings. My loan only ever covers my rent so to have to work for my bills and food money because my parents can’t really afford it, while other students get it handed on a plate is not equal or fair.

Olivia, Southampton

My Daughter has just started University and whilst I am not happy she has had to take a part time job to cover her living expenses. This July I am going to have to find 3 months worth of rent at £93 a week so that my daughter has accommodation to go back too. This extra £930 isn’t covered by student finance or any maintenance grant and will have to come out of my earnings which I just cannot afford, but will have to find a way of paying for it.

Jason, Truro

Couldn’t agree more – we have one daughter at university with another who will go in September. Right now we have no idea where we are going to get the money to subsidise her maintenance loan. As we are middle earners she will only get the absolute basic and we have to find the rest. If she is to be treated as an adult then she should be able to access other loans in order to help with rent, food, books and living rather than rely on us, her parents. This is a huge issue for so many people

Fran, UK

Hi, I study at Leeds College Of Music. My accomodation is £5500 for a 42 week contract flat. How much do the government give me? Clearly not enough, I get a maintenance loan of £3500. My parents don’t have that difference to help me out so I have to work during time I should be studying. I get by on very little and miss out on the social side of university as I have to stay in due to my need to budget. The £9000 doesn’t bother me too much as we get all that covered, it’s the living costs. In the real world a person CANNOT live off £3500 in a year. Yes, I don’t pay council tax or anything like that but surely the wider community can see that students don’t all have this cushty life that you think we do. It’s a daily struggle attempting to find a balance between how much I need to study and how much I need food and general living commodities.

Danny, Leeds

I hope this article gets more attention from the media! Finally the real issue has been published. I am a second year student studying in Birmingham, my Dad is a single parent of three and doesn’t have a large income at all. I do receive a slightly higher maintenance loan compared to others because of my Dads income, however the system is so ridiculous it bases it on previous years so my Dad is even worse off now! If it wasn’t for my extremely generous Grandparents and Aunt I wouldn’t have been able to carry on studying, absolutely no way. University accommodation prices are sickening compared to regular tenant prices. This is a topic that regularly gets discussed with me and my friends, no one feels the loan covers realistic living costs! Last year I was expected to pay £600 in a deposit for my second year house, this was paid for by my Grandparents as I was already close to reaching the limit on my student overdraft. I agree tuition fees are very high however the more current issue is actually being able to afford to live while studying.

Imogen, Birmingham

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Tesco’s ex-bosses to share £2m payout

E4y.net
3 February 2015Last updated at 18:55

A Tesco storeTesco said it had taken legal advice and could not withhold the payments.

Tesco’s former chief executive and finance director will share £2.2m in severance pay after the supermarket said it was “contractually committed” to make the payments.

Philip Clarke and Laurie McIlwee, who left the firm last year, will receive £1,217,000 and £970,880 respectively.

The payments were initially suspended while Tesco investigated last year’s £263m accounting scandal.

Tesco said it had taken legal advice and could not withhold the payments.

“Defending costly claims for the payments would not be in the company’s best interests,” it added in a statement.

In September, Tesco stunned investors when it announced that it had misstated its half-year profit guidance by £250m – a figure that was subsequently revised to £263m in October.

Mr Mcllwee resigned as chief finance officer in April last year – before the accounting irregularities were uncovered – while Mr Clarke was ousted in July after he failed to halt a dramatic decline in both sales and profits.

Tesco said it was “contractually committed” to make the relevant payment to each former director unless it could legally establish a case of gross misconduct against him.

The Serious Fraud Office (SFO) is currently carrying out a criminal investigation into the accounting irregularities at Tesco.

The company said that if new information came to light from the SFO probe then it “will pursue recovery of the payments and damages and has fully reserved all its legal rights in this respect”.

The announcement comes less than a week after Tesco named the 43 stores it is closing across the country, a move that will put 2,000 jobs at risk.

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BBA To Osborne: City Traders ‘Need Licence’

E4y.net

By Mark Kleinman, City Editor

All traders in Britain’s financial markets should be forced to seek professional qualifications before they can operate, the banking industry’s main lobbying group is to tell George Osborne.

Sky News has learnt that the British Bankers’ Association (BBA) will say in a submission to a Treasury-led consultation that recent City scandals mean the time has come for participants in financial markets to be formally licensed.

It will suggest that a range of qualifications should be established which would constitute “a licence to trade”, and will argue that industry codes of conduct should be endorsed by regulators in order to provide them with added teeth.

The recommendation will represent a watershed moment following years of resistance from the UK’s biggest banks for a statutory professional qualifications regime for those operating in the fixed-income, currencies and commodities (FICC) markets.

If implemented, it would mean a new licensing regime would be required, potentially for hundreds of thousands of employees in London and across the UK.

The BBA paper, which is expected to be made public on Wednesday, is being submitted to the Treasury following the launch of an inquiry called the Fair and Effective Markets Review by the Chancellor last year.

Speaking at Mansion House last June, Mr Osborne said: “The integrity of the City matters to the economy of Britain. Markets here set the interest rates for people’s mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy.

“I am going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them.”

The launch of the review followed two years of regulatory settlements between banks and financial watchdogs in London, New York and elsewhere in relation to the widespread manipulation of the Libor interbank borrowing rate.

Lenders including Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland were fined hundreds of millions of pounds for the abuse, which have been followed by similar manipulation in the foreign exchange markets.

In December, the Treasury announced that the Government would extend legislation put in place to regulate Libor to seven additional financial benchmarks, with those found guilty of manipulating them facing up to seven years in prison.

The BBA’s submission is also understood to call for an extension of UK regulators’ senior managers’ regime to all non-retail market participants in order to create a level playing field with retail banks.

It will also raise the alternative option of extending a certification regime on which the Financial Conduct Authority is consulting to those operating in wholesale markets who fall outside the current framework, according to an insider.

Since the financial crisis of 2008, a number of UK Government reviews have prompted a toughening of standards for bank employees.

The Parliamentary Commission on Banking Standards called for far greater accountability for senior bankers, with a string of measures now being implemented.

The industry has also attempted to weigh in with the creation of the Banking Standards Review Council, which will attempt to reshape culture and staff behaviour but will not have formal disciplinary powers.

The BBA declined to comment on Tuesday.

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FTSE 100 closes in on record level

E4y.net
3 February 2015Last updated at 17:52

Continue reading the main story

London | Wall Street | Asia

Continue reading the main story

FTSE 100 Index

Last Updated at 03 Feb 2015, 11:36 ET*Chart shows local timeFTSE 100 intraday chart

value change %
6871.80 +

+89.25
+

+1.32

Top winner and loser

Intertek Group

2429.00 p +

+149.00
+

+6.54

Aberdeen Asset Management

425.00 p

-15.10

-3.43
value change %

FTSE 250 Index

16570.30 +

+214.74
+

+1.31

FTSE 350 Index

3753.29 +

+48.73
+

+1.32

FTSE All Share Index

3685.14 +

+46.85
+

+1.29

FTSE Techmark Index

3629.08 +

+28.63
+

+0.80

(Close): London’s benchmark index edged closer to its 1999 record, buoyed by rising oil prices and hopes that tensions over Greece are receding.

The FTSE 100 rose 89.2 points, or 1.32%, to 6,871.8 – a four-month high – having reached 6,883 points during the day.

That was close to the 6,930 reached in December 1999 during the dotcom bubble.

Banks and oil stocks were big gainers, led by Barclays and Royal Dutch Shell both up 5.3%.

Chris Beauchamp, market analyst at IG, said hopes of a resolution over Greece debts talks had helped.

He said: “The bounce in oil, now in its third day and still looking as if it has legs, has certainly helped, but it is Greece that is the source of real optimism, A switch to a more conciliatory tone on the part of the [Greek] finance minister and the prime minister has raised hopes that a deal may be possible.”

BP closed 2.78% ahead after the oil giant reported that underlying fourth quarter profits fell 20% to $2.2bn. However, after taking into account a $3.6bn write-down on assets it posted a loss of $969m.

Commenting on BP’s results, Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “BP’s unerring ability to generate cash has… enabled the dividend to be maintained, which the company has described as the first priority, and the dividend level of around 5.3% remains a key attraction for income seeking investors, particularly given the current global hunt for yield.”

Oil boost

The oil price continued its recent rebound on Tuesday, with Brent crude rising 2.7% to $56.2 a barrel.

Commodity-related stocks dominated the risers board, with mining giant BHP Billiton up 5% and Anglo American 4.09% higher.

However, shares in BG Group fell 1.16% after the company said the slump in the oil price over the past few months had led it to write off $6bn from the value of its oil and gas business.

Aberdeen Asset Management led the FTSE 100 fallers, down 3.43% after it said funds under management fell in the final three months of last year.

Outside the FTSE 100, Ocado shares jumped 4.7% after the online retailer finally reported its first full-year pre-tax profit.

On the currency markets, the pound rose 0.7% against the dollar to $1.514, but 0.42% against the euro to €1.3203

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