Category Archives: Business

Africa, Aid, Britain, Business, Economic, G7, Government

Britain: Aid cash to be used in boosting trade with Africa

FOREIGN AID BUDGET

THERESA May has pledged to use Britain’s overseas aid budget to boost post-Brexit trade with Africa.

She told an audience in Cape Town that she is “unashamed” of her ambition to ensure the multibillion-pound pot “works for the UK”.

The Prime Minister said that from now on Britain’s foreign aid budget will not only help combat poverty, but support “our own national interest”.

It comes after the bloated aid budget – now standing at almost £14billion a year – has come under fire as officials struggling to spend the money quickly enough have donated to a series of increasingly controversial projects.

Mrs May said funds will be specifically used to “support the private sector to take root and grow”. This means Britain will employ its aid to help create the conditions for UK businesses to have confidence to invest in Africa.

She also said the funds should go towards boosting security and tackling terrorism in the continent – a move to which she insists will make the UK safer.

The money will also be used to encourage potential migrants to stay in Africa so they are not tempted to make the dangerous journey to Europe.

The commitment comes amid the UK’s huge foreign aid budget struggling to maintain public support. Critics have long opposed David Cameron’s controversial policy and target of spending 0.7 per cent of national income on overseas aid.

The target has meant huge increases in aid spending in recent years – and guarantees it will continue to grow.

Public anger has grown given some of the examples of how the money is spent. These include a £5.2million grant to girl band Yegna, nicknamed the “Ethiopian Spice Girls”, whose funding was only halted last year.

Downing Street will now hope that the announcement of a realignment of spending will help convince voters of its worth.

The Department for International Development gives around £2.6billion a year in bilateral aid to Africa. The Prime Minister has also announced a new ambition to make Britain the G7’s largest investor in the continent within four years.

At present the U.S. is the largest contributor to African investment, but Mrs May aims to leapfrog it by 2022.

In Cape Town, the Prime Minister talked about changing the face of the UK’s aid spending in Africa both to reflect the continent’s rapid growth and to benefit Britain. There is a huge opportunity for British trade in a post-Brexit world. Mrs May’s three-day trip to the African continent will also take in visits to Nigeria and Kenya.

The PM said: “It is the private sector that is the key to driving that growth – transforming labour markets… And the UK has the companies that can invest in and trade with Africa to do just this.

“The private sector has not yet managed to deliver the level of job creation and investment that many African nations need.

“So I want to put our development budget and expertise at the centre of our partnership as part of an ambitious new approach – and use this to support the private sector to take root and grow.

“I am unashamed about the need to ensure that our aid programme works for the UK.

“I am committing that our development spending will not only combat extreme poverty, but at the same time tackle global challenges and support our own national interest.

“This will ensure that our investment in aid benefits us all, as is fully aligned with our wider national security priorities.”

The Prime Minister also set out why working with Africa to deliver jobs, investment and long-term stability is in the interests of Britain and the wider world.

Mrs May pointed out that Africa needs to create millions of new jobs every year to keep pace with its rapidly growing population, adding: “The challenges facing Africa are not Africa’s alone.

“It is in the world’s interest to see that those jobs are created, to tackle the causes and symptoms of extremism and instability, to deal with migration flows and to encourage clean growth. If we fail to do so, the economic and environmental impacts will swiftly reach every corner of our networked, connected world.

“And the human impacts . . . will be similarly global.”

Addressing the issue of British trade, Mrs May said: “As Prime Minister of a trading nation whose success depends on global markets, I want to see strong African economies that British companies can do business with in a free and fair fashion.

“Whether through creating new customers for British exporters or opportunities for British investors, our integrated global economy means healthy African economies are good news for British people as well as African people.

“I want the UK to be the G7’s number one investor in Africa, with Britain’s private sector companies taking the lead in investing the billions that will see African economies growing by trillions.”

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Business, Economic, Government, Politics, Society

A cultural shift is needed to end gender discrimination

GENDER EQUALITY

IF we truly wanted to tackle the gender pay gap, we should be focussing on our biggest challenge: by encouraging women into the highest paid positions across all aspects of industry and employment.

In Scotland, only about a quarter of FTSE 100 company directors, public body chief executives, university principals, sheriffs and councillors are women. There are no female editors of major newspapers, or chief executives of FTSE 100 companies. Only seven per cent of senior police officers are women.

A way needs to be found to give women and men the same opportunities, and to create a pathway of equal chances. The senior management posts and highest-level specialist posts in so many fields are still significantly dominated by men.

One way to do this is by changing the grass roots narrative. Girls should be told from the earliest age that they can be anything they want to be; from train driver to football player; and from nuclear scientist to chief executive. Young girls should only be limited by their ability and their desire: never by their gender.

Our society needs to change its attitude, and in many cases its practices. If we are to ensure that girls get to progress in significantly growing numbers, starting in the home and then through pre-school, school and further education, these changes must now be our priority.

It is widely acknowledged that STEM careers are male-dominated. In the UK, just 15 per cent of engineering graduates are female. The figures are 19% for computer studies and 38% for maths. The shortfall is hardly surprising when we consider that only 13% of the overall UK STEM workforce is female and there are relatively few female STEM role models as a consequence.

We all need to embrace and encourage a fundamental change in attitude, and deliver a new atmosphere of equality – not just in business, but across all areas of society. By creating senior role models across traditionally male dominated sectors, we can foster a new attitude in young women, by encouraging them to pursue careers that they may not have originally considered.

Some of this change will evolve naturally through time, but society needs it sooner rather than in a generation or two. Women need to be correctly recognised and valued, and their potential realised for the benefit of our economy.

Research generated in 2015 showed that a more diverse and inclusive workforce helps business by bringing new skills, creativity and innovation, and achieving higher staff retention. Moving towards parity at top positions is not only likely to help the company’s performance; it could bring in added tax revenue. The same study estimated that closing gender pay gaps in work could add £150billion to UK gross domestic product in 2025.

Yet, there are still businesses in Scotland that pay male staff a higher rate than their female colleagues for the same job. We should be tracking down the offenders in this area, where like for like jobs are not paid the same. These disparities are unacceptable.

The Institute of Directors strongly supports the principle of equal pay and the need to create a better balance between male and female participation in the workforce so as to broaden the talent pool available to firms and employers.

Measuring pay gaps is very complex, and the use of averages can be misleading as peculiarities of industry, the nature of companies, geographies or circumstances make such comparisons unfair.

Governments should focus more on affordable and accessible childcare, encouraging more girls to study STEM subjects and providing better careers advice in schools. Policymakers should also focus on provision of leave and other measures which could help spread the strain of caring for children or the elderly.

Ultimately, a concerted effort must now be made to challenge the cultural norms: by encouraging more men and women to enter jobs that are outside conventional gender roles. Publishing crude averages alone will not tackle the root causes of the gender pay gap. There are numerous ways to improve the prospects of women in business and in other walks of life, but these must be done as part of a package of complementary measures designed to aid real and lasting change. Advancing the cause of women in the workplace and dealing with the gender pay gap are issues that aren’t going to go away until they are properly dealt with.

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Britain, Business, Economic, Government, Politics

Carney: A Brexit investment boom once deal with Brussels is signed

ECONOMIC

Carney

Mark Carney told MPs on the Treasury select committee an investment boom will follow once a Brexit deal with Brussels is agreed.

THE Bank of England’s Governor Mark Carney has predicted that businesses will launch major investment drives after Britain signs its Brexit deal with Brussels.

Mr Carney said many firms had put off important spending decisions since the referendum but may turn on the taps when Britain’s future relationship with Brussels becomes clear.

In comments highlighting the importance of striking a deal, he claimed that families were already £900 a year poorer than they would have been if Britain had voted not to leave the EU.

But he said there may be a pick-up in economic growth and productivity once Brexit is settled.

Appearing before MPs on the Treasury select committee, he added: ‘It’s understandable businesses are holding back – there are some big, big decisions that are about to be made.

‘I could build a case to say that actually business will use those clean balance sheets, access finance and start to put capital to work, and we should see a sharp pick-up in business investment.’

Mr Carney – who warned before the 2016 referendum that Brexit could be an economic disaster – added that the economy was as much as 2 per cent smaller than it would have been if Britain had chosen to remain.

Mr Carney said: ‘Real household incomes are about £900 per household lower than we forecast in mid-2016, which is a lot of money.’

The comments drew an immediate riposte from Foreign Secretary Boris Johnson, a leading Brexiteer.

On a visit to Buenos Aires, Mr Johnson rejected the Governor’s view and argued that Britain will prosper outside the EU thanks to new trading opportunities with countries such as Argentina.

Pro-Brexit MP John Redwood dismissed the claims that families were £900 worse off, saying: ‘I see no evidence.’

John Longworth, former director-general of the British Chambers of Commerce, said: ‘He’s basing that number on forecasts which were flawed. There are lots of factors influencing that number.’

GOVERNMENT BORROWING

BRITAIN’S borrowing is at its lowest for 16 years as rising tax receipts confound warnings of economic doom following the Brexit referendum.

In a sign that the vote to leave the EU has done nothing to derail plans to put the country’s finances back on a stable footing, the Office for National Statistics (ONS) said the Government borrowed £40.5billion last year – down from £153billion in 2009-10 under the last Labour government.

It is also around half the amount George Osborne predicted Britain would borrow last year in the event of a Brexit vote.

The figures give the lie to warnings that the decision to leave the EU would crash the economy and hammer tax receipts.

Instead, last year’s deficit was 2 per cent of national income – the lowest since 2001-02, when Tony Blair and Gordon Brown began a debt-fuelled spending spree.

When the Tory-Lib Dem coalition came to power in 2010, the deficit stood at 9.9 per cent of gross domestic product.

Liz Truss, Chief Secretary to the Treasury, said: ‘Borrowing as a share of our economy is at a 16-year low.

‘This is testament to the hard work of the British people as we fix our finances and build a Britain fit for the future.

‘We are strengthening the economy whilst cutting income tax and investing in public services. Labour would put that all at risk with their bonkers borrowing binge.’

In the so-called dossier of dome issued two years ago, former chancellor Mr Osborne said borrowing would hit almost £78billion last year if voters opted for Brexit.

In the Autumn Statement in November 2016, the Office for Budget Responsibility (OBR) pencilled in borrowing of £59billion as it warned of the impact of the Brexit vote.

In fact, the Government borrowed £40.5billion as tax receipts rose 3.4 per cent to a record £701.8billion. Corporation tax receipts rose 6.3 per cent to £57.7billion.

It borrowed a further £7.8billion in April, the first month of the fiscal year – down from £9billion in the same month last year.

Receipts from income tax and capital gains tax jumped 12.3 per cent to £12.8billion last month as record levels of employment boosted Treasury coffers. VAT receipts rose 2.8 per cent to £11.5billion.

The figures will put pressure on Chancellor Philip Hammond to ease austerity and free funds for public-sector pay rises.

But with the national debt close to £1.8trillion, or 85.1 per cent of national income, he will be reluctant to embark on a spree.

The national debt has risen nearly six-fold since 2000, from just over £300billion to nearly £1.8trillion.

The Government spent £54.6billion in debt interest payments alone last year – which equates to more than £1billion a week.

INFLATION

PRICES are rising at the slowest pace for more than a year in a boost to millions of families, official figures show.

The ONS said the annual rate of inflation fell from 2.5 per cent in March to 2.4 per cent in April.

That was the lowest level since March last year and down from a post-Brexit referendum peak of 3.1 per cent in November.

Inflation has risen by far less than feared since the Brexit vote and now appears to be heading back towards the 2 per cent target, easing pressure on family finances.

Two years ago, then Chancellor George Osborne warned that a Brexit vote would push inflation towards 5 per cent this year. Instead, it is only a little above the 2 per cent rate the OBR forecast for 2018 had the country voted to remain in the EU.

Brexit supporters branded the warnings issued by Mr Osborne and other Remain campaigners ‘ridiculous and outrageous’. With inflation falling and wages rising at the fastest pace for more than three years, analysts have said that ‘things are looking up for UK households’.

Chancellor Philip Hammond said: ‘Good news on inflation – it fell to 2.4 per cent in April and is expected to keep falling. With wages going up that means more money in people’s pockets.’

However, it is feared that the rising oil price may keep inflation above the 2 per cent target for longer than hoped as the cost of petrol and diesel increases.

The ONS figures follow a string of reports showing UK employment at a record high, unemployment at a 43-year low across the country and government borrowing at the lowest level for 16 years.

The flurry of upbeat economic data contrasts with warnings that the Brexit vote would crash the economy.

Before the referendum, Mr Osborne warned of an ‘immediate and profound shock to our economy’ that would plunge the UK into recession, put as many as 820,000 out of work and result in government borrowing of almost £78billion this year.

Instead, the UK economy has grown for seven quarters in a row since the referendum, employment has risen by 609,000, unemployment has fallen from 4.9 per cent to 4.2 per cent, and borrowing was around half what Mr Osborne claimed it might be.

Conservative MP Andrew Bridgen said: ‘As time progresses, people are seeing just how ridiculous and outrageous this was. There must be many people who voted Remain who now regret it, who were intimidated by the prophets of doom and gloom.’

Oil prices have been climbing after US President Donald Trump said the country would leave the Iran nuclear deal, raising the prospect of a fall in supply from the Middle East.

Brent crude surged above $80 per barrel last week, sparking fears of further fuel price increases.

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