Egg Credit Card Dispute

I have fallen out with Egg. This is not unusual. I fall out with most providers of financial services from banks to insurance companies. I fall out whenever I believe that I am being treated unfairly. This time it is Egg. Egg would like to charge me £16 for a late payment fee. Egg feels that they are justified. In essence I sympathise with them. The problem is that the dispute will cost them my permanent custom. I will move my credit card needs elsewhere. Secondly, Egg is now owned by Barclaycard. So as a result of my ire I intend close both my Egg and Barclaycard accounts. I have been with Barclaycard for 35 years.

When Egg was bought by Prudential, they paid approximately £500 per account holder. To quote Compare the Meerkat, the maths is simples. My loss of custom is perhaps worth £1,000.

Economic Recovery Still Delayed

The economic recovery is still some way from demonstrating it is fully on the road to recovery. Last week's budget may have had a mix of good and bad news but data from many market categories indicates that growth is a long way off.

We are involved in a number of markets. And can track short term variations in demand. Our observations showed that Autumn 2010 started poorly when a flood of bad news from the Conservative party conference depressed business and consumer markets. This news centred on the the so-called better off having to share the pain of paying for the deficit. Essentially anybody earning £42,000 was designated as rich. Effectively, families with a single wage earner on £42,000 were being asked to pay more so that the army of public sector workers and client state benefit claimants could carry on receiving their over generous transfer payments. The budget seems to have replicated the depressive impacts on many markets.

Bads news from a whole series of markets now seems the norm. With profit warnings and senior director dismissal being a regular feature of the newsflow.

I await some good news.  

Nike Losing in the Sports Brand War?

Welsh Rugby Player Jamie Roberts Wearing Under Armour

Nike, the giant American sports brand has issued a profits warning and the shares have shed 5%. This begs a question as to whether Nike is losing its position in the sports brand war. The company blames the rise in commodity prices. In my opinion Nike may well be losing some of its allure. Their sports icons such as golfer Tiger Woods and tennis player Roger Federer are losing their global standing. Meanwhile, new, more technical brands such as Under Armour are gaining ground in the more profitable sports accessories markets. Nike has focused its sponsorship activity on key personalities, such as Woods, with the inherent risks this brings. Meanwhile Under Armour has spent its money on teams such as football club Tottenham Hotspur and the Wales rugby team.

Nike's sports brand positioning has been unchallenged over the past two decades facing down Adidas, Puma and Reebok. The new environment is more challenging and I suspect that this latest downturn in the companies financial performance may be more than a blip.

UK Families Are Highest Taxed in OECD

A new report shows that UK families with one employed parent are the most highly taxed in the OECD. A family earning £33,745 will pay 39% more tax than the average for 33 other OECD countries.

The report has provoked charities, as well as economists, into attacking the UK governments ant-family stance. In essence, Britain is punishing middle income families in order to fund a benefits system that encourages workless families to remain dependent on state handouts.

As we know, price inflation is now rising faster than incomes. In addition taxation in the form of higher VAT and national insurance is hitting family incomes even harder.

Fuel bills, fares to work, basic food stuffs, rent or mortgages, council tax and water rates have to be paid. Families have to look to make ends meet so discretionary spending has to be cut and savings have to be made. One area that is now under scrutiny is money spent on things such as family holidays and and another is children's parties. In recent years these items of expenditure are no longer considered luxuries. In each case families will be looking for value for money.

The UK government should take a look at other systems of family taxation. The gap between working families and those where everyone is dependent on the state has shrunk. In many cases families gain very little from gainful employment. This trend needs to be reversed.

High Vehicle Costs and Petrol Allowances

The HMRC allows 40p per mile for travel costs when using a car for business purposes. The rate of 40p per mile was set in 2002 when a litre of unleaded cost an average of 77.9p. Today the average cost of a litre is around £1.30, representing a rise of 68%. The rise in vehicle costs without a commensurate rise in travel allowances means the role of vehicle tracking systems becomes ever more crucial. Every additional and unnecessary mile driven adds unnecessary costs.

I use my own car for business trips. Tomorrow I am to make a business trip of around 264 miles. My mileage allowance will be £105.60. Back in 2002, at 33 miles per gallon my petrol costs would have been £28.29, leaving £77.31 to cover both the variable costs and a contribution towards the shared fixed costs of car ownersip. Tomorrow my petrol costs will be £47.22, leaving just £58.38 towards other costs. Even if all other costs had stayed the same since 2002, I am left with a 24.5% shortfall. I am probably, therefore subsidising my employer.

A quic estimate of the true costs of the trip - based on its share of my annual mileage - indicates a fairer mileage contribution would be nearer 65p per mile. I drive about 9,000 business miles per year and further 4,000 miles on private mileage. At current mileage rates and petrol costs it would appear that I am subsidising my business to the tune of £2,250 per annum. The daft thing is, if my business was to compensate me for these increased costs I would need to pay tax on them as a benefit. If the HMRC fails to raise mileage rates I foresee increase demands to bring back company vehicles.

VAT Rise - Retail Prices Up by 5 to 8%

UK VAT rose from 17.5% to 20% today. This means a whole range of goods and services will go up in price. The UK Government has introduced the tax rise in an attempt to raise £13 billion and close some of the £160 billion annual deficit it inherited from Labour.

The Daily Telegraph points out that many retailers will increase their prices by far more than the 2.1% net increase the tax rise should bring. It reports that many retailers will round up prices rather than round them down. It quotes examples of mobile phone tariffs going up by 10 and 20%. It also quotes the examples of Fitness first that has put up monthly subscriptions by 25% in some cases. I have personal experience of the Fitness First rise where a I received a letter informain me of 30%. I raised the matter with my local gym and have downgraded my membership in order to retain the old price.