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      in UK Politics

      Russia tensions reveal threat to UK food supplies, farming chief warns

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      Tensions in Russia and Ukraine have revealed a risk to the UK’s food supplies with soaring costs and post Brexit in-fighting helping to create a “perfect storm”, a farming chief has warned.The two sparring countries provide 30 per cent of the world’s global wheat exports and a recent temporary block on fertiliser chemicals exported by Russia saw prices more than doubling.Minette Batters, president of the National Farmers’ Union (NFU), said warning about UK food security had fallen on deaf ears for years, but now had to be taken seriously by the government.“I cannot understand why you would not treat food security as importantly as defence,” she told The Independent. “The quickest way to create a serious issue [for a country] is if you have food shortages.”Russia imposed a two-month block on exports of ammonium nitrate this month, Ms Batters said, a key tool for boosting yields from crops such as wheat and cotton.The move has driven up global fertiliser costs which were already stoked by sanctions on Belaruskali, Belarus’s biggest potash supplier, imposed by the US, UK and others last year.Belarus and Russia account for 38 per cent of the global supply of potash, according to figures compiled by the Canadian government. Farmers’ profit margins have been decimated by the uptick in fertiliser prices, in addition to higher energy bills, labour costs and global supply chain disruptions.Ms Batters said: “Last year I paid under £300 a tonne for nitrogen fertilizer, this year, it’s over £700 a tonne.“[Russia and Ukraine] know exactly how much the world is reliant on them for natural gas and fertilizer.” Ms Batters’ warning came as the World Bank and other multilateral agencies warned of rising global food prices and insecurity, with inflation for agricultural products rising by 25 per cent in January 2022, compared to the same month in 2021. She said the problem were compounded by post-Brexit changes to trade and agricultural policy, which are threatening to put many farmers out of business: “Agriculture seems to be the pawn in trade deals. So I think it is a perfect storm.”She said although there were “people in government who seem to get this”, such an understanding “doesn’t come from the prime minister”.“All you hear is this rhetoric around putting land aside for nature, build back Beaver, this is a very frustrating adversarial approach between setting land aside and producing food,” she said. The result is that food production “just doesn’t seem to get cut though at the moment”. The NFU’s intervention comes after Sir Geoffrey Clifton Brown, the conservative deputy chair of the public accounts committee warned last month that the Department for Environment, Food and Rural Affairs’ (Defra) new Environment Land Management schemes would “undermine” a “critical national sector” pushing farmers out of business. “The recent energy price crisis should be a salutary warning of the potential risks to the availability and affordability of food if the UK becomes even more reliant on food imports,” Sir Geoffrey said.The problem of food security has been laid bare during the Covid-19 pandemic. Several countries put up barriers to stop food exports as well as medical products, according to Simon Evenett, economics professor at Switzerlaversity of St Gallen, and author of the Global Trade Alert.Costs are also rising for consumers, with Tesco warning that prices would rise at a rate of around 5 per cent in the coming months.“At the moment, the consumer here is getting a better deal than anyone in the world unless you happen to be living in some states of the US or Singapore. We’ve got the most affordable food in European here right now,” she said.But that is in large part because the UK has managed to remain 60 per cent self-sufficient for food production, something that is now under threat.A Defra spokesperson said the government was taking a “test and trial” approach to new subsidies for the agricultural sector at present. They added: “We continue to champion food production, but some land use change is inevitable if we are to restore 300,000 hectares of land to nature. However, this is only a relatively small proportion of more than nine million hectares of farmland in England.” More

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      in UK Politics

      UK exports to EU plunge £20bn in first full year after Brexit

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      UK exports to the EU collapsed by £20bn in the first full year after Brexit, official figures show, as businesses grappled with delays, extra costs and new red tape. Sales to the trading bloc fell much more sharply last year than exports to the rest of the world, the Office for National Statistics (ONS) reported. Exports to the EU crashed 12 per cent between January and December last year compared with 2018, while non-EU exports were down 6 per cent.Analysts said the UK continued to lag behind competitors, thanks in part to new trade barriers.Total exports fell by more than 10 per cent in Britain’s first year outside the single market compared to 2018 – the last period before Brexit and Covid-19 caused huge disruption to international trade. Imports from the EU also fell 17 per cent to £222bn – the lowest level in five years. The amount of goods bought from EU nations fell below imports from the non-EU countries for the first time since comparable records began in 1997.Meanwhile imports from non-EU countries rose from £206bn in 2020 to £254bn last year, the most on record.The trade deficit – the gap between imports and exports – is widening, and hit its highest point on record last year.The UK imported £15bn more in 2021 than it exported, an increase of 20 per cent on the year before and up significantly compared to previous years.Part of the reason for this yawning deficit is that UK services exports, once a powerhouse of economic growth, remain 4.6 per cent down on 2018 levels at £24.9bn.Further changes to the trading regime due to come in later this year threaten to cause more upheaval.From July there will be new physical checks on plants, health certificates will be needed for animal products and all imports will need safety and security declarations.James Smith, research director at the Resolution Foundation think tank, said: “While the economy is at pre-pandemic levels, UK trade continues to lag many of its main competitors. While Covid has undoubtedly damaged trade, so too has the introduction of fresh trade barriers with the EU.“As well as facing up to the cost of living challenge, the government also needs to redouble efforts to boost trade as part of a new economic strategy for the 2020s.” More

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      in US Politics

      ‘Unions benefit all of us’: new Biden plan encourages federal workers to unionize

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      ‘Unions benefit all of us’: new Biden plan encourages federal workers to unionizeTaskforce sets recommendations ‘to promote my policy of support for worker power, worker organizing and collective bargaining’ The Biden administration set out 70 recommendations to encourage union membership in the US on Monday, including making it easier for many federal employees to join unions and eliminating barriers for union organizers to talk with workers on federal property.The report, compiled by the White House Task Force on Worker Organizing and Empowerment, reiterates Biden’s robust backing of unions. “At its core,” the report says, “it is our administration’s belief that unions benefit all of us.”Traffic, tickets, gas: rideshare and delivery app workers fight to unionizeRead moreIt adds: “Researchers have found that today’s union households earn up to 20% more than non-union households, with an even greater union advantage for workers with less formal education and workers of color.”The report comes amid a surge in interest in unions in the US and follows a wave of high-profile industrial actions last year.The taskforce, which includes 13 members of Biden’s cabinet and is chaired by Vice-President Kamala Harris, calls for stepping up enforcement to ensure that money going to federal contractors – whether manufacturers, food-processing companies or other contractors – is not spent on anti-union campaigns.The taskforce calls for requiring disclosure of any instances when federal contractors use anti-union consultants or lawyers to persuade employees working on a federal contract not to unionize.While corporations typically prohibit union organizers from setting foot on company property – as Amazon has done recently in Alabama – the taskforce recommends removing many barriers that block union organizers from being able to talk with employees on federal property about the benefits of unionizing. This applies not just to federal employees, but also to employees of private contractors on federal property, such as a grocery store on a military base or in a national park.Biden said the taskforce’s charge was to identify executive branch policies, practices and programs that could be used “to promote my administration’s policy of support for worker power, worker organizing, and collective bargaining”.The taskforce said the range of policies and programs “that can be leveraged is significant”.Its recommendations include making the federal government a model employer in terms of shaping jobs, ensuring that federal employees know their labor rights, and improving labor-management communications. The federal government is the nation’s largest employer, with more than 2.1 million non-postal employees. Of those, 1.2 million are represented by unions, but only 33% of those workers pay union dues – that small percentage limits the power of federal employee unions.Noting that screeners for the Transportation Security Administration (TSA) are largely excluded from having the collective bargaining rights available to other non-military federal employees, the taskforce instructed the Department of Homeland Security to issue expanded bargaining rights for TSA’s screening workforce.The report is likely to strengthen the notion that Biden is the most pro-union president since Franklin Roosevelt – and perhaps the most pro-union president in US history. That might help Biden when he seeks to persuade and mobilize union members to vote for Democrats this November. At the same time, the report’s pro-union tone and substance might result in more opposition from business.In its first sentence, the report says: “The Biden-Harris administration believes that increasing worker organizing and empowerment is critical to growing the middle class, building an economy that puts workers first, and strengthening our democracy.” The report catalogues several executive orders and other pro-union steps by the president and his administration.It reads: “Unions have fought for and helped win many aspects of our work lives many of us take for granted today, like the 40-hour work week and the weekend, as well as landmark programs like Medicare.”The report adds that research has shown that increased economic inequality, growing pay gaps for women and workers of color, and the declining voice of working-class Americans in the nation’s politics “are all caused, in part, by the declining percentage of workers represented by unions”.The taskforce calls on the Department of Labor – whose secretary, Martin Walsh, is the taskforce’s vice-chair – to become a resource center that provides materials on the advantages of union representation and collective bargaining.TopicsUS unionsBiden administrationUS politicsnewsReuse this content More

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      in US Politics

      The Fed is about to raise interest rates and shaft American workers – again | Robert Reich

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      The Fed is about to raise interest rates and shaft American workers – againRobert ReichPolicymakers fear a labor shortage is pushing up wages and prices. Wrong. Real wages are down and workers are struggling The January jobs report from the US labor department is heightening fears that a so-called “tight” labor market is fueling inflation, and therefore the Fed must put on the brakes by raising interest rates.This line of reasoning is totally wrong.Trump and his enablers unwittingly offer Democrats the best hope in the midterms | Robert ReichRead moreAmong the biggest job gains in January were workers who are normally temporary and paid low wages: leisure and hospitality, retail, transport and warehousing. In January, employers cut fewer of these workers than in most years because of rising customer demand combined with Omicron’s negative effect on the supply of workers. Due to the Bureau of Labor Statistics’ “seasonal adjustment”, cutting fewer workers than usual for this time of year appears as “adding lots of jobs”.Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices – and that this wage-price spiral could get out of control.It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.There’s no “wage-price spiral” either, even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices. To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.Wage-price spirals used to be a problem. Remember when John F Kennedy “jawboned” steel executives and the United Steel Workers to keep a lid on wages and prices? But such spirals are no longer a problem. That’s because the typical worker today has little or no bargaining power.Only 6% of private-sector workers are unionized. A half-century ago, more than a third were. Today, corporations can increase output by outsourcing just about anything anywhere because capital is global. A half-century ago, corporations needing more output had to bargain with their own workers to get it.These changes have shifted power from labor to capital – increasing the share of the economic pie going to profits and shrinking the share going to wages. This power shift ended wage-price spirals.Slowing the economy won’t remedy either of the two real causes of today’s inflation – continuing worldwide bottlenecks in the supply of goods and the ease with which big corporations (with record profits) pass these costs to customers in higher prices.Supply bottlenecks are all around us. Just take a look at all the ships with billions of dollars of cargo idling outside the Ports of Los Angeles and Long Beach, through which 40% of all US seaborne imports flow.Big corporations have no incentive to absorb the rising costs of such supplies – even with profit margins at their highest level in 70 years. They have enough market power to pass these costs on to consumers, sometimes using inflation to justify even bigger price hikes.“A little bit of inflation is always good in our business,” the chief executive of Kroger said last June.“What we are very good at is pricing,” the chief executive of Colgate-Palmolive said in October.In fact, the Fed’s plan to slow the economy is the opposite of what’s needed now or in the foreseeable future. Covid is still with us. Even in its wake, we’ll be dealing with its damaging consequences for years: everything from long-term Covid to school children months or years behind.Friday’s jobs report shows that the economy is still 2.9m jobs below what it had in February 2020. Given the growth of the US population, it’s 4.5m short of what it would have by now had there been no pandemic.Consumers are almost tapped out. Not only are real (inflation-adjusted) incomes down but pandemic assistance has ended. Extra jobless benefits are gone. Child tax credits have expired. Rent moratoriums are over. Small wonder consumer spending fell 0.6% in December, the first decrease since last February.Many people are understandably gloomy about the future. The University of Michigan consumer sentiment survey plummeted in January to its lowest level since late 2011, back when the economy was trying to recover from the global financial crisis. The Conference Board’s index of confidence also dropped in January.Given all this, the last thing average working people need is for the Fed to raise interest rates and slow the economy further. The problem most people face isn’t inflation. It’s a lack of good jobs.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
      TopicsFederal ReserveOpinionUS economyEconomicsUS unemployment and employment dataUS unionsUS domestic policyUS politicscommentReuse this content More

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      in US Politics

      US appears to shake off Omicron and adds nearly half a million January jobs

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      US appears to shake off Omicron and adds nearly half a million January jobsEconomists had predicted dramatic slump in job growth but labor department figures much better than expected The US economy appeared to shake off the Omicron variant in January as employers added 467,000 new jobs, the labor department reported on Friday.Data for the report was collected in mid-January when the Omicron variant was at its peak in the US. While some economists – and the White House – had predicted a dramatic slump in jobs growth, the number of jobs added was far better than expected.The unemployment rate remained low overall at 4%, down from a pandemic high of 14.8% in April 2020 but up from 3.9% in December.The news comes at a sensitive time for the Biden administration and the Federal Reserve. The US economy is wrestling with soaring inflation and signs of an economic slowdown after last year’s strong rebound.Joe Biden celebrated the jobs news in a speech in Washington. “America is back to work,” Biden said. “History’s been made here.”His comments were in stark contrast to those made by White House officials earlier in the week. In a highly unusual move, the White House sought to manage expectations ahead of the latest jobs figure release, cautioning that Friday’s jobs report could be “confusing” because of the timing of the survey and suggesting that the US would add few or even lose jobs in January.Covid infections have fallen sharply across the US since the report was compiled.The government report follows on from a survey conducted by ADP, the US’s largest private payroll supplier, which reported that companies cut jobs in January for the first time in more than a year. Payrolls fell by 301,000 for the month with more than half the losses coming from the pandemic-sensitive leisure and hospitality industries.“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth,” said Nela Richardson, ADP’s chief economist.There were signs that the jobs market is still recovering ahead of Friday’s report. On Thursday, the labor department reported that new unemployment claims fell to 238,000 for the final week in January, dropping 23,000 from the week prior, a second straight week of falls.TopicsUS economyUS unemployment and employment statisticsUnemployment and employment statisticsCoronavirusOmicron variantUS politicsnewsReuse this content More

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      in UK Politics

      Energy price cap: how high will bills rise and what government support is available?

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      Energy bills are about to jump significantly after regulators raised the price cap which sets the maximum suppliers can charge.But what does it mean for household budgets?How much will my gas and electricity bills increase?The energy price cap will increase by 54 per cent from 1 April for approximately 22 million customers. Ofgem calculates this means the average household will pay £1,971 for their gas and electricity for the year. That’s an increase of £693.An average pre-payment customer will see an increase of £708 from £1,309 to £2,017 a year.It won’t apply if you are on a fixed-term energy tariff, in which case your existing rate will continue to apply until the deal ends.The price cap sets the top rate suppliers can charge per unit of gas and electricity. It is not a cap on customers’ overall energy bills, which will still rise or fall depending on energy consumption. From 1 April, electricity costs are capped at 28p per kWh for electricity and 7p per kWh for gas. Businesses on commercial contracts are not protected by a cap. Unless wholesale energy prices fall, the cap will increase again in October, with experts forecasting it will hit £2,300.What financial support has the government announced?Rishi Sunak revealed that the government will give an upfront £200 discount to all domestic energy customers from October. It will be automatically taken off people’s bills, with the government loaning the money to suppliers to cover the costs. Pre-payment customers will receive £200 credit.That money will then be repaid in annual instalments of £40 added to customers’ bills over five years from 2023. It means the overall burden on bills will not be reduced but will be paid over a longer period.The government is banking on wholesale energy costs eventually coming down but markets indicate gas prices will remain elevated until at least the end of next year.Based on current prices, experts forecast that the price can will jump to around £2,300 in October when the £200 discount is to be applied, meaning it will cover less than one fifth of the £1,000 increase compared current prices.It is also universal, meaning that it will apply to all households, whatever their financial circumstances. A number of charities and think tanks had called for cash to be targeted at those most in need.Council tax rebatesAround 80 per cent of households will also get £150 off their council tax bill. A rebate will be applied in April to all residential properties in England rated A to D for council tax.Equivalent funding worth £56m in total will be supplied to devolved administrations in Wales, Scotland and Northern Ireland.You do not have to apply for the rebate. It will be applied automatically.While the move will be welcomed, critics have pointed out that it is poorly targeted. Council tax bands were calculated in 1991 and are a poor indicator of people’s incomes. Millions of the UK’s highest earners will pay less tax while many of those in lower income groups will be left out. Those that don’t pay Council Tax (such as students, some tenants and some benefit claimants) won’t get the full package of support either.Campaigners had called for money to be distributed through the universal credit system to ensure the poorest groups benefited most. The government rejected that approach and also declined to cut VAT on fuel bills from 5 per cent to zero, arguing that the measure would have benefitted wealthy households most.Discretionary fundThere is also a £144m discretionary fund which councils in England can allocate to people who are on low incomes but who do not automatically qualify for a rebate because they are not in a band A to D property, or because they don’t pay council tax at all.Speak to your local authority to see if you are eligible.Warm homes discountThe government will go ahead with planned expansion of the warm homes discount which it says will increase the number of people eligible by one third – around 780,000 families.The £140 per year payment for low-income families in England and Wales will increase to £150 next winter. If you are elligible you can apply for the discount through your energy supplier.The Resolution Foundation said the measures do not provide enough help for people on low incomes to deal with price rises.The think tank estimates that, as a result, the number of people struggling to pay for enough energy this year will double to five million this year. More

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      in UK Politics

      Levelling up efforts could fail the poorest, IFS warns

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      The government’s flagship levelling up policy risks failing Britain’s poorest by focusing on places, rather than poverty, a leading economic think tank has warned. Regional inequality is persistent and worsening the Institute for Fiscal Studies (IFS) said on Tuesday, in an analysis ahead of the government’s delayed policy white paper, expected this week. However, while places are at risk of losing out on economic growth and opportunities, some of the UK’s poorest people also live in the country’s wealthy regions. “It is really important to remember in all this that, while high paid jobs are unevenly spread, low paid jobs, and indeed poverty, are not,” said Paul Johnson, director of the IFS.“A higher fraction of London’s population is in poverty than in any other region. We need to worry about places, but we need to worry about people too”, he added. Wages for the lowest earners in the UK are similar irrespective of location, the IFS found. For those workers in the bottom 10 per cent, by earnings, wages are around £8-9 per hour in every region. In areas where other living costs, such as housing, are more expensive, such as London, that means that workers are more likely to be in poverty. The IFS found that 28 per cent of Londoners were in poverty from 2016-2019 compared to the national average of 22 per cent. Yet while low wages tend to be similarly low across the country, there’s a considerable gap between top earners in different regions – and that is a difference which has persisted for decades, according to the think tank. The top 10 per cent of earners in London were paid 80 per cent more per hour than the comparable group of workers in Scarborough. This effect is shown by comparing tax and population data too, the IFS said: while around one in seven of the UK population live in London, some one in three of the top 1 per cent of income taxpayers live in the city.Beyond wages, in areas such as educational outcomes, there are also stark divides. In Grimsby, in the north of England, fewer than one in five children go on to university, compared to one in three in London. Well trained graduates from other areas are also likely to move to cities where there are already lots of other highly skilled workers: one in two people with degrees in Grimsby move away by the age of 27, the IFS said. The think tank also found that cuts to public spending introduced from 2010 onward exacerbated regional inequalities. This suggests that some of the government’s efforts with levelling up will in part have to be aimed at repairing some of this impact. From 2009-10 to 2019-20, spending on services – not including education fell by an average of 31 per cent for councils in the 10 per cent most deprived areas. That is nearly double the drop of 16 per cent per resident in the 10 per cent least deprived locations, the IFS’ study found. More