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      in UK Politics

      ‘F*** Business’: The story of how corporate Britain got screwed by Brexit

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      On 22 June 2016 – the day before the Brexit referendum – more than 1,000 business executives signed a letter backing the UK’s membership of the European Union.The group, which including the bosses of half of the companies in the FTSE 100, stated: “Britain leaving the EU would mean uncertainty for our firms, less trade with Europe and fewer jobs”.
      Business lost that battle of course. The electorate voted by 52 per cent to 48 per cent to leave.
      And the stark reality is that business has lost just about every battle since.
      After the referendum, corporate Britain fought for the UK to remain, if not in the European Union itself, then at least in the EU’s single market and the customs union. They lobbied for a liberal immigration regime.  But the customs union membership is going, single market membership will soon be history and the incoming new immigration regime will be much more restrictive.
      And now, if Boris Johnson fails to conclude a free trade deal, there is the prospect of tariffs on exports to and imports from a region with which we do almost half our trade. All from the end of this month.“It’d be hard to imagine a worse outcome than this,” admits one weary business representative.
      Even a thin free trade agreement would be well below the worst fears of many firms and lobby groups on that morning after the shock referendum result back in 2016.As ministers freely admit, the UK government has been battling for the abstract conception of “sovereignty”, not concrete business interests, in the negotiations with Brussels.Deal or no deal, business has lost the Brexit war.
      So how did it come to this?
      In June 2018 Boris Johnson, then Foreign Secretary in Theresa May’s government, was at an event for EU diplomats.  Belgium’s ambassador to the EU asked about businesses concerns about the possibility of a hard Brexit, which in those more innocent days was defined as the UK leaving the single market and customs union.
      “Fuck business,” was Johnson’s reported response.So whose fault is it that business has lost the Brexit war?
      Was it the fault of a Conservative Party driven by pro-Brexit ideology? Was it because ministers were too afraid to challenge the prejudices of party members? Or was it a failure of businesses to lobby effectively? Did corporate Britain fail to grasp the nature of the post-referendum world and the new priorities of the public?  Did politicians fuck business or did business, to some extent, screw themselves?  Opening the closetIt was this decision by Ms May which set the UK on an early course to a hard Brexit.
      “If we [business] had been bolder during that first six-month period and more collected that would have made a difference,” says Ms Sykes. More

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      in World Politics

      Oman Has Much to Offer the EU

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      Oman and the European Union share common interests in a number of political, economic, commercial and security fields. Oman’s strategic location and links to key international trade routes are of great importance to European interests in the region. In September 2018, Brussels and Muscat signed a cooperation agreement, in addition to the one signed by the European External Action Department and the Omani Ministry of Foreign Affairs, with the aim of strengthening political dialogue and cooperation in sectors of mutual interest.

      Sultan Qaboos Brought Light and Modernity to Oman

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      Oman shares with the EU the challenge of maritime piracy, which is one of the most pressing security issues that both sides face in the Indian Ocean. Since 2008, Oman has been an important partner in Operation Atlanta, the EU Naval Force mission to combat piracy on the coasts of Somalia, the Horn of Africa and the Gulf of Aden.

      Oman’s policy of being open with the world and balanced between the poles on opposing sides of regional conflicts — especially those represented by the Islamic Republic of Iran, Saudi Arabia and the United States — is similar to many EU policies in the Middle East. Muscat has highlighted its role in many regional and international issues, with Omani diplomacy complementing EU efforts to preserve stability and security in the region in ways that serve European interests.

      Investor Confidence

      Oman is considered a major logistical center for the Middle East, with its three major ports of Sohar, Duqm and Salalah, as well as a number of economic, marine and land “free zones.” With the aim of establishing an integrated infrastructure system for Oman, the General Authority for Special Economic Zones and Free Zones was launched in August to supervise the Special Economic Zone in Duqm and the free zones in Mazyouna, Salalah and Sohar.

      Embed from Getty Images

      An attractive environment for foreign direct investment (FDI) was created with the coming into force of the Foreign Capital Investment Law in January this year that allows foreigners to own 100% of investment projects as well as granting tax exemptions and customs duties. Moreover, the law does not set a minimum investment capital, facilitates procedures for establishing investment projects, grants extended rights to the use of investment lands and permits the transfer of capital to investor countries.

      In addition, Oman is the fifth safest country in the world and the third in the region, according to a recent report by Numbeo, which adds to investor confidence. In the first quarter of 2020, FDI reached over 15 billion Omani rials ($40 billion). With money coming from Iran, Kuwait, China, Saudi Arabia, South Korea, numbers from the National Center for Statistics and Information indicate that American and British capital constituted the highest share of FDI. The EU, however, has seen low investment rates in the country, with only the Netherlands coming in at roughly 304.7 million rials.

      The Vice President of the European Investment Bank (EBI) Vazil Hudak, during the International Investors Forum held in Muscat in 2019, spoke of the strengths of EU investment in Oman and the “huge” opportunities it offers. EBI is the largest financial investment institution in the world, with assets of more than €600 billion ($726 billion) and annually lends out nearly €70 billion. The EU could deepen its bilateral cooperation with Oman, directing EIB investments to achieve sustainable economic development in Oman, particularly after the economic crisis caused by the COVID-19 pandemic.

      Crisis Cooperation

      In the long term, Oman has paid attention to improving its economy by diversifying sources of income and raising the contribution of non-oil sectors to the gross domestic product. Oman was the first of the Gulf Cooperation Council (GCC) countries to develop plans to reduce its dependence on oil and diversify its economy. As a result of these policies, in 2020, Oman achieved nearly 3 billion rials in profits in the non-petroleum sector that made up 28% of the total contribution to the GDP, an increase of 6% over 2019.

      Despite the COVID-19 pandemic and accompanying lockdown measures that put strains on the economy, Oman has sought to avoid withdrawing from its sovereign reserves estimated to be worth $17 billion and moved toward setting policies to cut spending and adopt a short-term fiscal balance plan for the next four years with the aim of improving the economic situation and raising the country’s credit rating.

      The EU is currently witnessing difficult times as a result of the pandemic and the severe economic effects associated with it, coinciding with the UK’s exit from the European Union at the end of the year. In light of the circumstances, commercial and economic interests between Oman and the EU should expand into joint action, moving forward on pending agreements, including the free trade agreement that the two sides used to manage collectively through dialogue between the GCC and the EU. These negotiations were hit by apathy due to a lack of agreement over customs tariffs and the continuing blockade of Qatar since 2017. But talks on bilateral free trade agreements between Oman and the EU countries have become crucial to removing trade barriers and spurring economic growth.

      Tourism and transport sectors were among the most affected by the COVID-19 pandemic globally, with analysts predicting that tourism recovery will take up to two years, and air transportation estimated to take anywhere from two to six years. In 2018, the tourism sector contributed 2.6% to the country’s economy and was one of the five key sectors that Oman’s Ninth Five-Year Plan focused on. Given the damage inflicted on the sector during the pandemic, recovery should be stimulated by easing travel procedures. On December 9, Omani authorities issued a decision to exempt citizens of 103 countries (including the EU) from entry visa requirements for 10 days with the aim of stimulating transport and tourism after the pandemic.

      On the European Union side, the decision to exempt Omanis from the Schengen zone is still under consideration despite the ongoing talks between the two sides over the last years. An easing of entry requirements for Omanis will contribute to enhancing tourism traffic between the two sides.

      The cooperation and partnership in times of crisis creates opportunities for broader ties and paths toward economic sustainability, political stability and security for countries. The European Union is an important partner for Oman and can take advantage of the sultanate’s fortunate geographical location. The advancement of Oman-EU relations is an important factor for both sides, especially in the post-COVID-19 era.

      *[Fair Observer is a media partner of Gulf State Analytics.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in UK Politics

      Britain to drop tariffs on US related to Airbus subsidy dispute after Brexit next year

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      The Department for International Trade has announced that the UK will unilaterally drop tariffs on US goods related to the long-standing Airbus-Boeing state aid dispute from next year when the UK leaves the European Union’s customs union.The move is being seen by some as an attempt by the UK to curry favour with the incoming Biden administration and encourage Washington to look more kindly on proposals for an US-UK post-Brexit trade deal, whose prospects have been thrown into doubt by Joe Biden’s election victory.The EU imposed retaliatory tariffs on $4bn worth of US-made products, ranging from molasses to orange juice, in November, after being authorised to do so by the World Trade Organisation (WTO).This included the UK, as the country remains, until 31 December, an effective member of the EU customs union. But the Trade Department announced on Tuesday night that when the UK exists the post-Brexit transition in less than 24 days and gains full control over UK tariff policy, it will remove these import levies.The move might prove controversial because, as part of the same dispute (and also sanctioned by the WTO) the US has hit $7.5bn of EU goods with tariffs, including a 15 per cent levy on imports of Airbus aircraft.Airbus employs some 6,000 workers at Broughton in Wales, where the wings of its line of aircrafts are assembled.  The European aviation giant company announced plans to make 1,700 redundancies in its UK operations this year because of the losses caused by a slump in air travel this year.The Trade Department said, however, it would roll over EU tariffs on US steel next year, put in place in retaliation for Donald Trump’s import tariffs on European steel, including metal manufactured in Britain.And it added that it “reserves the right” to re-impose the Airbus-related tariffs at any point unless the US moves towards a settlement that lifts retaliatory tariffs on UK exports.
      The Trade Secretary, Liz Truss, said the move on Airbus-related tariffs would show the US “we are serious about ending a dispute that benefits neither country”.
      “Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this,” she said.
      The Trump administration had been keen on an early US-UK trade deal, but in an interview with The New York Times earlier this month Joe Biden said: “I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers”.Sam Lowe of the Centre for European Reform said de-escalating trade tensions with the US was in the UK’s interests, although he felt it wasn’t likely to be a game changer over the timing of a US-UK trade deal.
      If the UK could negotiate a settlement with the US on the Boeing-Airbus dispute that would certainly be in everyone’s interestSam Lowe, Centre for European Reform“While a trade agreement with a Biden administration is unlikely to arise any time soon, if the UK could negotiate a settlement with the US on the Boeing-Airbus dispute that would certainly be in everyone’s interest, particularly the British producers who are currently facing US tariffs as a result,” he said.
      Holger Hestermeyer of King’s College London, however, suggested the UK move could be primarily motivated by legal considerations.“The UK does not have a sufficiently solid legal basis to impose tariffs related to the Boeing dispute, as the EU and not the UK has been granted authorisation to take countermeasures,” he said.“The situation is different with regard to steel as the legal basis there is entirely different and the UK can rely on the same construct as the EU.”The EU and the US have been in a 16-year battle over claims that they have each given illicit state aid to their respective leading aircraft manufacturers.
      The World Trade Organisation last year effectively ruled that both had been guilty of the practice, allowing each side to impose tariffs on the other in retaliation, with the US going first. The US’s tariffs hit Gouda cheese, French wine and Scotch single-malt whisky.The EU had hoped that it could negotiate a settlement with the US whereby it would not have to impose its own tariffs, but it went ahead with the import levies in November, after finding the Trump administration was refusing to engage. More

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      in US Politics

      Trump officials scramble to justify decision not to buy extra Pfizer vaccine doses

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      The Trump administration on Tuesday scrambled to justify a decision not to buy millions of backup doses of a Covid-19 vaccine developed by Pfizer as the vaccine appeared likely to become the first approved for use in the United States.Government regulators with the Food and Drug Administration (FDA) announced favorable preliminary findings on Tuesday from a review of Pfizer data, following approval for use in the UK and the first post-approval vaccination there.The Trump administration last spring made a deal for 100m doses of the Pfizer vaccine candidate, but the administration turned down an offer to reserve additional doses, Scott Gottlieb, a current Pfizer board member and former FDA commissioner, confirmed on Tuesday.“Pfizer did offer an additional allotment coming out of that plan, basically the second-quarter allotment, to the US government multiple times – and as recently as after the interim data came out and we knew this vaccine looked to be effective,” Gottlieb told CNBC.“I think they were betting that more than one vaccine is going to get authorized and there will be more vaccines on the market, and that perhaps could be why they didn’t take up that additional 100m option agreement.”With global demand for its vaccine soaring following successful trial results and approval in the United Kingdom, New York-based Pfizer cannot guarantee the United States additional doses before next June, the New York Times reported.The extent to which the decision not to acquire more of the Pfizer vaccine could impede the vaccination effort in the United States was unclear.The news came as the US was on the verge of surpassing 15 million coronavirus cases, the highest number in the world.A second vaccine candidate is currently up for emergency approval from the FDA, and multiple additional vaccine candidates – some of them easier to manage than the Pfizer vaccine, which must be stored at extremely cold temperatures – are in the final stages of clinical review.But Donald Trump and officials involved in the vaccine development program scrambled on Tuesday to head off the perception that the government had failed to get first in line for sufficient supplies of a vaccine produced by an American-based company. US-based Pfizer partnered and its German pharmaceutical partner, BioNTech, are on track to have the first vaccine approved in the US.To celebrate the good vaccine news and tout his role in it, Trump planned to host an event at the White House on Tuesday billed as a “vaccine summit”. He planned to unveil an executive order to prioritize vaccine shipments to “Americans before other nations,” but as with many headline-grabbing orders issued by Trump the decree did not appear to be impactful or enforceable, analysts said.Asked on ABC’s Good Morning America on Tuesday how the order would work, the official in charge of the government’s vaccine development program, Operation Warp Speed, Moncef Slaoui, said: “Frankly, I don’t know.”Health officials named by president-elect Joe Biden, who will lead the vaccine rollout effort after taking office next month, were not invited to the White House event, underscoring the risks of a lack of continuity in the effort.And executives from two drug companies, Pfizer and Moderna – whose own vaccine candidate is also up for approval from the FDA – were invited to the White House by Trump but declined, Stat News reported.Slaoui defended the administration’s decision not to buy more doses of the Pfizer vaccine, in his appearance Tuesday on ABC, saying they were looking at several different vaccines during the summer when it had the option to lock in additional Pfizer vaccine doses.“No one reasonably would buy more from any one of those vaccines because we didn’t know which one would work and which one would be better than the other,” said Slaoui. Before taking his current post, Slaoui resigned from the Moderna board.The US government has also contracted for 100m doses of the Moderna vaccine. Both vaccines require two doses per patient, although a preliminary report on the Pfizer vaccine issued on Tuesday by the FDA found some protection after just one dose.The report, which found “no specific safety concerns identified that would preclude issuance” of an emergency use authorization, accelerated the path to approval. “FDA has determined that [Pfizer] has provided adequate information to ensure the vaccine’s quality and consistency for authorization of the product under an EUA,” the report said.A spokeswoman for the Department of Health and Human Services told the Times that in addition to Pfizer and Moderna, the government had signed contracts for doses for other vaccine candidates that have not yet reached the stage of seeking regulatory approval.“We are confident that we will have 100 million doses of Pfizer’s vaccine as agreed to in our contract, and beyond that, we have five other vaccine candidates, including 100 million doses on the way from Moderna,” she said. More

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      in UK Politics

      Here’s what Brexit will mean for your house prices and mortgages

      by

      On 31 December the post-Brexit transition period ends and, with or without a free trade deal with the European Union, the UK will start life outside the EU’s single market and customs union.That will, pretty much all economists tell us, have a substantial economic impact on our lives.  But what exactly will those impacts be – and how will ordinary people experience them?
      Below we describe how the two varieties of Brexit are likely to impact house prices and mortgages – two areas which people commonly equate with their wealth and personal finances.Leaving the EU with a free trade deal would, according to the Treasury’s independent Office for Budget Responsibility be a long-term drag on the economy, reducing economic output by around 4 per cent relative to otherwise.
      But it would mean any short-term disruption, above and beyond the huge coronavirus impact, would be avoided.
      During the lockdown earlier this year the housing market largely ground to a halt, with the number of transactions collapsing in April.But the traded price of the average house hasn’t collapsed this year. And the market has been bolstered by a stamp duty holiday from the chancellor announced in the summer, which lasts until March 2021.All this suggests that leaving the EU with a successful trade deal probably won’t have a short-term negative impact on house prices.
      In the longer term, the price of housing will be determined by the balance of supply of new housing and the demand for it and also interest rates. Moving from EU membership to a free-trade deal with the bloc is unlikely to directly influence these major structural determinants.As for mortgages, most borrowers’ repayments are indirectly determined by the main national interest rate set by the Bank of England. Leaving the EU with a trade deal would be a more benign economic scenario from the point of view of the Bank’s rate setting committee.It might bring forward the date at which the Bank raises rates, relative to a no-deal scenario on 31 December. And that could push up mortgage repayments for many households.Yet the Bank is mindful of the overall economy, which is still in the grip of the coronavirus emergency, and financial markets are not expecting significant rate rises from the Bank any time soon, whether there is a Brexit deal or not.Some surveyors are nervous about the impact of a no-deal Brexit on the UK housing market.  Several cite it, alongside the impact of Covid, in the latest survey by the Royal Institution of Chartered Surveyors (RICS) as a potential dampener on the market.  If unemployment rises sharply next year because of the coronavirus crisis and a no-deal Brexit that’s unlikely to be positive for house prices.Yet it’s hard to say with any confidence that house prices would fall in the event of a no-deal Brexit, especially as they have held up extraordinarily well in the face of the coronavirus crisis, which has seen the biggest shock to the UK economy in some three hundred years.
      As for mortgages, financial markets are currently pricing in the Bank of England cutting interest rates below zero in the coming months to help support the economy. Many analysts think a no-deal Brexit could be the factor that pushes the Bank to take such a plunge into negative territory for the first time.While negative interest rates probably wouldn’t result in a fall in average mortgage repayments from their current ultra-low levels, it would ensure they didn’t rise.  This could help cushion the financial blow of a no-deal Brexit for some households. But for those who work in sectors such as manufacturing, which are especially exposed to the shock of a no-deal Brexit, the bigger threat to their livelihoods would probably be redundancy than rising mortgage repayments. More

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      in UK Politics

      Here’s what Brexit will mean for your wages, benefits and taxes OLD

      by

      On 31 December the post-Brexit transition period ends and, with or without a free trade deal with the European Union, the UK will start life outside the EU’s single market and customs union.That will, pretty much all economists tell us, have a substantial economic impact on our lives.  But what exactly will those impacts be – and how will ordinary people experience them?
      Below we describe how the two varieties of Brexit are likely to impact peoples’ wages, benefits and taxes.There are various ways of modelling the economic impact of the UK leaving the EU.  One is to analyse the likely overall economic impact on the UK economy of higher trade barriers with the EU, the bloc with which we currently do around half of our trade.Virtually every macroeconomic trade model shows that leaving the EU with a free trade deal would hold back the UK economy’s growth relative to staying in the bloc. The Office for Budget Responsibility, the Treasury’s own independent forecaster, this week estimated it would impede UK GDP growth over the next 15 or so years by around 4 per cent relative to where it otherwise would have been.  This picture would be roughly the same if we successfully concluded ambitious trade deals with the likes of countries such as the US, Australia and New Zealand.  The Government’s own economic modelling team estimates all these deals combined would add a maximum of 0.2 per cent of GDP in the long run.This 4 per cent of GDP loss accounts for £80bn in today’s money, or around £3,000 for each of the UK’s 28 million households. This could be experienced in the form of lower wages, lower benefits and higher taxes than otherwise would have accrued to households.  £3,000A rough indication of the size of the economic pain that would be borne by the average household from leaving the EU with a Brexit dealIt’s impossible to say exactly how much individual households would suffer financially, because this will depend on which sectors of the economy members of a household work in and the decisions of future politicians about redistribution through benefits and taxes. But this £3,000 figure gives a rough indication of the size of the economic pain that would be borne by the average householdAnother way to model Brexit is to examine different sectors such as agriculture, finance, fishing, manufacturing and so on. These exercises show that some sectors, specifically those that do a great deal more in trade with the Continent than others, would face more damage.  Modelling suggests clothing, chemicals, pharmaceuticals, motor manufacturing, agriculture and financial services would be hit the most.  This implies that workers in those industries would likely face a more severe economic hit. But firms in sectors that don’t trade much with Europe, such as construction, might well be relatively unaffected. However, it’s important to stress that such sectors could also be negatively impacted by future restrictions on EU migration, which would have implications for the wages of those who currently work in them.Leaving the EU without a trade deal on 31 December would, according to the UK’s independent Office for Budget Responsibility (OBR), hold back UK GDP growth by around 2 per cent in 2021, or £40bn.  That translates into a loss of £1,500 per UK household. And over 15 years the OBR estimates, based on the modelling done by a host of independent researchers, that the damage would hit 6 per cent of GDP, or around £120bn, or around £4,000 per household.
      Again, it’s impossible to say precisely which households would suffer because this would depend on which sectors people work in and the decisions of future politicians about benefits and taxes.  Yet this is a rough indication of the size of the economic pain that would be borne – in some way – by the average UK household.
      The impact of a no-deal Brexit on particular sectors would be even more unequally felt than leaving the EU with a free trade deal.  Many exporting firms would face EU tariffs, which would make those exports less competitive and likely reduce demand for them, blowing a hole in the incomes of people working in these sectors.The impact on the automotive sector would be especially severe because all cars exported to the EU ( the destination of half of UK-manufactured cars), would be hit by a 10 per cent tariff.The OBR thinks unemployment would rise by around 300,000 next year, relative to otherwise, if we left the EU without a free trade deal. It’s likely that these lost jobs would be concentrated in those sectors which are heavily reliant on EU trade. Researchers at the Institute for Fiscal Studies calculate that lower-skilled workers more likely to be hit economically by a no-deal Brexit.“These tend to be older men with skills specific to their occupation who, history suggests, may struggle to find equally well-paid work if their current employment were to disappear,” they note. More

    • 138 Shares139 Views

      in UK Politics

      Here’s what Brexit will mean for your wages, benefits and taxes

      by

      On 31 December the post-Brexit transition period ends and, with or without a free trade deal with the European Union, the UK will start life outside the EU’s single market and customs union.That will, pretty much all economists tell us, have a substantial economic impact on our lives.  But what exactly will those impacts be – and how will ordinary people experience them?
      Below we describe how the two varieties of Brexit are likely to impact peoples’ wages, benefits and taxes.There are various ways of modelling the economic impact of the UK leaving the EU.  One is to analyse the likely overall economic impact on the UK economy of higher trade barriers with the EU, the bloc with which we currently do around half of our trade.Virtually every macroeconomic trade model shows that leaving the EU with a free trade deal would hold back the UK economy’s growth relative to staying in the bloc. The Office for Budget Responsibility, the Treasury’s own independent forecaster, this week estimated it would impede UK GDP growth over the next 15 or so years by around 4 per cent relative to where it otherwise would have been.  This picture would be roughly the same if we successfully concluded ambitious trade deals with the likes of countries such as the US, Australia and New Zealand.  The Government’s own economic modelling team estimates all these deals combined would add a maximum of 0.2 per cent of GDP in the long run.This 4 per cent of GDP loss accounts for £80bn in today’s money, or around £3,000 for each of the UK’s 28 million households. This could be experienced in the form of lower wages, lower benefits and higher taxes than otherwise would have accrued to households.  £3,000A rough indication of the size of the economic pain that would be borne by the average household from leaving the EU with a Brexit dealIt’s impossible to say exactly how much individual households would suffer financially, because this will depend on which sectors of the economy members of a household work in and the decisions of future politicians about redistribution through benefits and taxes. But this £3,000 figure gives a rough indication of the size of the economic pain that would be borne by the average householdAnother way to model Brexit is to examine different sectors such as agriculture, finance, fishing, manufacturing and so on. These exercises show that some sectors, specifically those that do a great deal more in trade with the Continent than others, would face more damage.  Modelling suggests clothing, chemicals, pharmaceuticals, motor manufacturing, agriculture and financial services would be hit the most.  This implies that workers in those industries would likely face a more severe economic hit. But firms in sectors that don’t trade much with Europe, such as construction, might well be relatively unaffected. However, it’s important to stress that such sectors could also be negatively impacted by future restrictions on EU migration, which would have implications for the wages of those who currently work in them.Leaving the EU without a trade deal on 31 December would, according to the UK’s independent Office for Budget Responsibility (OBR), hold back UK GDP growth by around 2 per cent in 2021, or £40bn.  That translates into a loss of £1,500 per UK household. And over 15 years the OBR estimates, based on the modelling done by a host of independent researchers, that the damage would hit 6 per cent of GDP, or around £120bn, or around £4,000 per household.
      Again, it’s impossible to say precisely which households would suffer because this would depend on which sectors people work in and the decisions of future politicians about benefits and taxes.  Yet this is a rough indication of the size of the economic pain that would be borne – in some way – by the average UK household.
      The impact of a no-deal Brexit on particular sectors would be even more unequally felt than leaving the EU with a free trade deal.  Many exporting firms would face EU tariffs, which would make those exports less competitive and likely reduce demand for them, blowing a hole in the incomes of people working in these sectors.The impact on the automotive sector would be especially severe because all cars exported to the EU ( the destination of half of UK-manufactured cars), would be hit by a 10 per cent tariff.The OBR thinks unemployment would rise by around 300,000 next year, relative to otherwise, if we left the EU without a free trade deal. It’s likely that these lost jobs would be concentrated in those sectors which are heavily reliant on EU trade. Researchers at the Institute for Fiscal Studies calculate that lower-skilled workers more likely to be hit economically by a no-deal Brexit.“These tend to be older men with skills specific to their occupation who, history suggests, may struggle to find equally well-paid work if their current employment were to disappear,” they note. More

    • 188 Shares149 Views

      in US Politics

      'Right now, I'm in panic mode': US freelancers plead with Congress to pass Covid relief

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      Suzy Young, an artist in Winterport, Maine, cheered when Congress enacted an innovative program that provided unemployment benefits to artists, freelancers and the self-employed after Covid-19 hit the US. But like many others, Young – whose art sales have plunged in recent months – is angry that this pandemic aid program is due to expire the day after Christmas.Young was already upset that the most generous part of the program – $600 a week in supplemental jobless benefits – expired in July, but now she fears she will lose all her jobless benefits. Four months behind on her $1,800 rent, she is fighting her landlord’s effort to evict her and her disabled husband on 1 January.“Congress needs to do something, or a lot of people are going to face homelessness,” said Young, 58. A fiber artist who weaves works out of wool, Young saw her income disappear when the farmers market where she sold her work was closed due to the lockdown. “That killed my business,” she said. She was getting by while receiving the $600 weekly supplement, but once that disappeared, her unemployment benefits fell to $172 a week.A study by the Century Foundation estimates that 7.3 million freelancers, artists, self-employed and others will lose their weekly benefits if the Pandemic Unemployment Assistance program (known as PUA) expires, as scheduled, after Christmas. That program is unusual because jobless benefits traditionally go only to laid-off workers who are considered employees – and not to freelancers or the self-employed. A second program – Pandemic Emergency Unemployment Compensation – is also scheduled to expire 26 December, ending special federal benefits for 4.6 million laid-off workers who were considered employees.“A lot of these people [freelancers and the self-employed] were out of work, and not eligible for regular unemployment benefits,” said Andrew Stettner, a senior fellow at the Century Foundation. “This program has been really successful. These people really need this bridge until the economy gets back to a better place.” After the $600 benefit supplement expired in July, freelancers and the self-employed continued receiving regular unemployment benefits, but the average nationwide for them has been just $207 a week, although it’s two or three times that in some states.Last Tuesday, a bipartisan group of nine senators proposed a $908bn stimulus and relief package that included a $300 weekly jobless supplement, half the former $600. The senators said their plan “would increase unemployment benefits to help families make ends meet”. That same day, five Democratic senators, including the minority leader, Chuck Schumer, proposed a relief plan that would restore the $600 boost in benefits as well as extend normal jobless benefits by 26 weeks. The Senate majority leader, Mitch McConnell, threw cold water on the bipartisan plan, saying: “We just don’t have time to waste time.”Rafael Espinal, president of the 500,000-member Freelancers Union, said the senators’ $300-a-week proposal was inadequate. “Considering the cost of living in cities, $300 isn’t going to allow people to pay their rent or meet other demands.”Grant McDonald, a New York-based video director who films concerts and special events, has had little work since March and worries about PUA expiring. “It’s pretty drastic sitting here, waiting for my savings to run out,” he said. McDonald fears he will soon fall behind on his rent; he may then move in with his father.“I have worked very hard to build a career in this city,” McDonald said, worried that leaving New York will set back his career.McDonald and Stephanie Freed, who lights fashion shows and other special events, founded ExtendPUA, a group that has lobbied dozens of senators and representatives to extend pandemic assistance and restore the $600 supplement. Many Republicans oppose the $600 level, saying it costs too much and discourages people from seeking work.We need to help people out here from starving. We need Congress to hear us, we’re in the worst placeBut ExtendPUA argues that it’s not wise to press people to look for work when the pandemic is raging or when skilled people with long careers, on Broadway, for instance, have little idea when they’ll return to regular work.“Any economist will say you don’t want skilled people to give up their work and not be able to get back to what they’ve given up,” Stettner said. “We can see that the vaccine will make everything better, and if we can just extend these benefits a little longer, it will make a big difference for a lot of people. If you lose your car or get evicted, those are not easy things to recover from.”Steve Gregg stopped working as an Uber driver in San Francisco after Covid-19 hit – he has diabetes and lung problems. Greg said the $600 supplement, on top of his $450 in regular weekly jobless benefits, “saved me, I would have lost my home”. But with the $600 expired, Gregg, divorced and paying child support, has moved into a single room in Modesto he shares with a cousin. “If they want us not to be homeless, they better pass something,” Gregg said. “I have no flexibility. I’ve cut back on many things.”Friends tell Gregg he has an extraordinary voice and should do TV voiceovers, but he doesn’t have the several hundred dollars to go to a studio to prepare a proper sample recording.Shan Grimm, a guitarist for jazz and R&B bands in New Orleans, fears she and her daughter will be evicted once the moratorium on evictions ends. She receives $247 a week in jobless benefits, but her rent is $850 a month, her car insurance $193 and her phone $60. “I’m trying to figure out what I’m going to do, where I’m going to go,” said Grimm, who also worked as a bartender. “Even $300 a week would make a big difference. Right now, I’m in panic mode. I have $107 in my bank account. I’ve been eating once a day.”“We are the people and Congress needs to hear us,” Grimm added. “We need to help people out here from starving. We need Congress to hear us, we’re in the worst place.” More