A round-up of the main news stories from this week.
UK Government Loses to Iceland Over Compensation Bid
The UK government has failed in its attempt to recoup £100 million in interest from Iceland after a bitter dispute over the failed Icesave account. The European Free Trade Association court ruled that EU regulations as they existed at the time did not oblige the Icelandic government to compensate other governments for bailing out their own savers. But administrators for failed bank Landsbanki said that the funds were there to pay the rest of its maximum compensation bill.
Government Launches ‘Green Deal’
The government launched the Green Deal this week, in an attempt to create more energy-efficient homes and lower gas and electricity bills. The deal sees homeowners offered loans at competitive rates for energy-saving home improvements which would then be retrieved by electricity firms. Critics of the scheme argue the cost of financing a loan somewhat defeats the point of reducing utility bills.
NS&I to Increase ISA Rates
Close to 100,000 savers with the Treasury-backed NS&I are to benefit when returns on their old ISAs increase to over four times their current rates. In May, more than £450 million in ISA funds will be automatically transferred into the new Direct ISA, which offers 2.25% compared to the current offering of just 0.5%. NS&I has become a popular destination for high-volume savers following the collapse of Northern Rock as it is an agent of the Treasury and all deposits are secure.
Barclays Boss Turns Down £1 Million Bonus
Barclays’ chief executive Antony Jenkins has turned down bonuses thought to be worth £1 million for 2012. Mr Jenkins argued that he thought it would be wrong to accept any bonus in light of the bank’s performance, and that he accepted a degree of accountability for the scandals, most of which were instigated under the tenure of Bob Diamond. Mr Jenkins has staked his reputation on cleaning up the bank’s profit-ridden culture and damaged public reputation.
HMRC Receives First Tax Avoidance Payment from Switzerland
HMRC has received the first instalment of £342 million as part of a new agreement with Switzerland to reclaim lost tax. UK nationals who have avoided tax through Swiss bank accounts are to pay back arrears totalling £5 billion through a levy on their accounts. Those who fail to disclose their arrangements to HMRC will be struck with a withholding charge of 48%. Prime Minister David Cameron has told world leaders that countries need to co-operate in a concerted effort to combat tax avoidance.
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