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Deeper in debt paying for the energy companies’ failures

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The Troublemaker looks at the week's news including energy company rip offs and Tory vaccination lies
Issue 2811
Credit cards

People are running up higher debts

Almost a third of people who use buy now, pay later (BNPL) credit say ­repayments on the loans have become “unmanageable”. The cost of living crisis has pushed them into a debt spiral, new research has found.

The social emergency of rising prices and falling ­benefits and wages in real terms means people are using these schemes more and more. People who use BNPL are now paying off an average of 4.8 purchases, almost double the 2.6 purchases in February, the research found.

BNPL lets people stagger payments for items such as clothes and furniture with no interest or charges—unless they can’t pay back on time. Firms then impose “late fees”. It’s a lesser-known scandal than the vicious interest rates that payday lenders push through.

Richard Lane, director of external affairs at the debt charity StepChange, said, “There is rising evidence that BNPL isn’t just being used to buy discretionary items like fashion, but also life’s essentials, like groceries.” The multibillion-pound sector is dominated by firms such as Klarna, Clearpay and Laybuy. It’s presently unregulated and new rules may not come in until 2024.

Meanwhile, everyone who pays a fuel bill faces a charge of £94 more a year each to cover the £2.7 billion cost of the failure of 28 privatised suppliers.

The National Audit Office (NAO) said last week that regulator Ofgem had allowed a market to develop that was vulnerable to large shocks.The result of last year’s shock was that 2.4 million customers were automatically moved to a rival company when their own supplier collapsed.

Typically, according to Citizens Advice, they had to pay an extra £30 a month for the duration of their original contract, as they were shifted to a more expensive tariff.

In addition, the cost of these failures totalled £2.7 billion which the firms foisted on to every  bill payer in Britain. This is before taking into account the potentially multi-billion charge that households could face due to the collapse of Bulb Energy, which is in special administration.

Don’t tax rich says Johnson 

Boris Johnson wants to hand billions to the mega-rich. Allies of the prime minister said last week that Johnson is determined to stop next year’s rise in corporation tax, announced by Rishi Sunak last year.

But any changes to the planned rise would leave the Treasury with a £15 billion-a-year black hole at a time when growth is stagnating. One senior Conservative source told The Times newspaper that Johnson was prepared to have a “big fight” with Sunak over the issue. Even with the rise, Britain would still have the lowest corporation tax rate of the advanced G7 economies.

Racist cop jailed

A former police constable has been jailed for 20 weeks after sending a string of racist WhatsApp memes, including images that mocked the death of George Floyd. James Watts was serving with West Mercia police in 2020 when he shared the “grossly offensive” material in a group chat that included former colleagues at a Warwickshire prison.

After a police inquiry, Watts was found to have posted ten offensive memes in May and June 2020. These included one featuring a white dog wearing Ku Klux Klan clothing and another showing a kneeling mat with Floyd’s face printed on it.

A co-defendant, the West Mercia police constable Joann Jinks, is due to stand trial on 23 August charged with three counts of the same offence.

Cruising to the scrapyard

What was meant to be one of the world’s largest cruise ships is heading for its final destination, the scrapyard. Global dream II, designed to hold more than 9,000 passengers, had almost been completed at a shipyard on Germany’s Baltic coast. But shipbuilder MV Werften filed for bankruptcy in January 2022 and the administrators cannot find a buyer. 

Now the administrators wants the ship out of the yard—which it sold to Thyssenkrupp’s naval unit. It plans to build military vessels there.

Tory Media minister Nadine Dorries took a trip to Cornwall earlier this month. The train was late and she was looking at missing a connection. She asked staff onboard to call ahead to the connecting station to get them to hold the train back for her. But she was told that, no, that wouldn’t be possible. So she took matters into in her own hands. She texted the transport secretary Grant Shapps to see if there was anything he could do to get her train held back instead. But he couldn’t either.

The outgoing chief executive of the discount retailer B&M grabbed £5 million last year. Simon Arora’s pay package rose by more than a third to 270 times that of the average B&M worker.  This was despite flatlining profits and falling sales in the year to the end of March. Arora, who leaves next year, booked a long term share bonus worth £2.6 million and an annual bonus of £1.5 million. That’s on top of his “basic” salary of £810,000 before benefits such as a company car and pension payments.

Tories’ vaccination lies

The government has broken its promise to deliver 100 million surplus Covid vaccines to poor countries. At a G7 meeting in June last year, Boris Johnson pledged to send the vaccines to developing countries within a year to help close the global vaccine gap and “vaccinate the world”. But a year later the government has delivered barely a third of the number of promised jabs, with just 36.5 million deployed as of the end of May.

Figures published by the government also show that ministers have effectively charged developing countries for the leftover jabs by deducting them from existing aid. They have even added a mark-up on Britain’s original purchase price. There is still a stark vaccine divide across the world, with just one in five Africans having received a single dose compared to 65 percent of all people worldwide.

Over £100 million was taken out of the British aid budget to cover the cost of the surplus coronavirus vaccines sent abroad.

Cashing in on the Hajj

Saudi Arabia has partially outsourced the Hajj pilgrimage process to a company with ties to India’s far right ruling party and its leader Narendra Modi.

The Saudi government announced that potential Hajj pilgrims from Europe, the US and Australia will now need to apply for visas and permits for the pilgrimage via the online government portal Motawif.

The Motawif portal has at least one investor with close ties to India’s ruling BJP party. It has implemented anti-Muslim policies and plays a role in the persecution of Muslims throughout India. According to a report by Middle East Eye, Prashant Prakash—vice president at venture capital firm Accel India—was a key investor in the company which the Saudi government hired to set up the new Hajj application system.

Last year Prakash became a policy and strategy adviser to Basavaraj Bommai, a key ally of prime minister Modi and the chief minister of the BJP-run government in the Indian state of Karnataka. Accel India has also been a long-time investor in Israeli start-ups, reportedly having invested over £300 million into the country’s industry.

Things they say

‘Historic victory for white life’

Republican congresswoman Mary Miller at an Illinois Trump rally on the US Supreme Court’s decision to overturn Roe v Wade

‘Passed immediately to one of the prince’s charities’

A Palace spokesperson explains what Prince Charles did with a suitcase full of £1 million in cash given to him by the former prime minister of Qatar

‘I think that actually people were fed up with hearing about things I had stuffed up, or allegedly stuffed up’

Boris Johnson explains why the Tories lost two by-election last week. 

‘I’m not sure that my friends in the City are finding it too difficult to jog along at the moment’

Jacob Rees-Mogg on the effect of the cost of living crisis

‘A serious party of government does not join picket lines’

Labour MP David Lammy

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