David Cameron’s calls for tighter rules on European migration yesterday sparked a row over free movement within the EU. Brussels accused the PM of overreacting and making Britain look “nasty” by suggesting a range of new measures including controls on when migrants can start to claim benefits. Cameron also pledged to find employers who fail to pay the minimum wage £20,000 – four times the current penalty. Paris and Berlin supported the measures, while right-wing Conservatives accused him of being too weak. The proposals have been criticised by Labour as political game-playing ahead of the 2015 election. (FT, p.3) Germany, Spain and France have each had higher net EU immigration than the UK, while the UK sends more migrants to other parts of the EU than all but four other countries: Germany, Italy, Poland and Romania. (City AM, p.7)
Bank of England governor Mark Carney fears a new bubble could be building in the housing market, in correspondence published today ahead of a new Financial Stability Report. In his letter, Carney said that he is preparing measures that could stabilise the market, should his intervention be needed. (City AM, p.9) The letter also made clear that the Bank does not have a veto on the Help to Buy scheme, therefore exposing George Osborne’s claim to have handed new powers to the Bank as a charade. (Philip Aldrick, Times, p.57) Carney also warned that while improvements in the housing market have helped the recovery, rising house prices are ‘unlikely’ to solve Britain’s housing shortage. (Telegraph, B5)
Londoners save less of their monthly income than people in any other part of England and Wales, leaving the capital’s population facing a savings timebomb, according to a new report published by the Halifax. (City AM, p.1) Despite higher earnings, those in the capital have on average just £8,147 in their savings accounts, the equivalent of 22% of their annual salary. Across the rest of the country, 29% of a person’s salary is normal, rising to 34% in the east Midlands, Wales and the South West. Women’s average savings are above those of male savers everywhere except in the North East, pointing to a ‘fundamental difference in the attitude towards saving between the sexes’.
Npower plans to cut 1,400 jobs as part of an overhaul of its UK operations in a move that is likely to further inflame public anger at the big six utilities. (FT, p.20) The news comes a month after Npower announced it was putting up dual fuel bills by 10.4%. Npower employs about 12,000 people in the UK, and plans to close some sites entirely and out-source some of its back-office operations to India. Staff at the call centres in Thornaby, Teeside, Stoke-on-Trent, Peterlee and Durham are most at risk. (The Sun, p.20) Unison said that the move was “a Christmas nightmare for staff” and the GMB union described the plans as “naked greed.”