UK news
Subterms
More stories
- in US Politics
Joe Biden’s mission at the G7 summit: to recruit allies for the next cold war | Rafael Behr
Joe Biden crosses the Atlantic this week on a tide of goodwill. After four years of Donald Trump, European leaders are grateful for the mere fact of a US president who believes in democracy and understands diplomacy.Trump had no concept of historical alliance, strategic partnership or mutual interest. He saw multilateral institutions as conspiracies against US power, which he could not distinguish from his own ego. He heard European talk of a rules-based international order as the contemptible bleating of weakling nations.Biden’s stated purpose is bolstering that order. In an article published in the Washington Post on the eve of his trip, the president talks about “renewed” and “unwavering” commitment to a transatlantic relationship based on “shared democratic values”.The itinerary starts in Cornwall with a gathering of G7 leaders. Then comes Brussels for a Nato summit, plus meetings with presidents of the European Council and Commission. Biden intends to orchestrate a surge of western solidarity as mood music ahead of a final stop in Geneva, where he sits down with Vladimir Putin. On that front, a stable chilling of relations will count as progress after the downright weirdness of Trump’s willing bamboozlement by the Kremlin strongman.A re-enactment of cold war choreography would suit Putin by flattering his pretence that Russia is still a superpower. In reality, Washington sees Moscow as a declining force that compensates for its shrunken influence by lashing out where it can, causing mischief and sowing discord. Putin is seen as an irritant, not a rival.That is in marked contrast to the view of China – an actual superpower and the eastern pole that Biden has in mind when he talks about reviving an alliance of western democracies. In that respect, the repudiation of Trumpian wrecking-ball rhetoric can be misleading. It sounds to European ears as if the new White House administration is hoping to set the clock back to a calmer, less combative epoch. In reality, Biden is coming to tell Europe to get its act together in the coming race for global supremacy with Beijing.By Europe, in this context, the president also means Britain. Boris Johnson might imagine himself a world leader of continental stature, but a US president is not required to indulge that fantasy.Biden takes a dim view of Brexit, seeing it as a pointless sabotage of European unity. The White House preferred Britain as a pro-US voice wielding influence inside the EU. Since that function is lost, Brexit’s only utility is in making it easier for the UK to embrace economic and strategic vassalage to the US. That means toeing a hawkish line on China.European nations should not really have to pause for long if the choice is alignment with Washington or Beijing. It is easy to muster resentment of US global swagger and point out hypocrisies in its claim to be a beacon of political freedom. But the alternative is an expansionist totalitarian state that militates against democracy and is currently engaged in a genocide against the Uyghurs.If China were a poorer country, Biden’s mission would be easier. But the economic gap between the established superpower and the challenger is closing. Per capita, Americans are still much better off, but China could overtake the US in gross domestic product by the end of this decade. With that heft comes world-leading technological capability with crossover military application that keeps the Pentagon up at night.During the cold war, the Kremlin maintained a credible military rivalry with the west but was not an economic competitor for long. The collapse of the Soviet model seemed to prove that political freedom and prosperity came as a package. There could be no enterprise without markets, no markets without fair rules, and no enforceable rules without democracy. The Chinese Communist party’s hybrid model of authoritarian capitalism appears to have disproved that theory.When the G7 was conceived in the 1970s, its combined membership – the US, Canada, Britain, France, Germany, Italy and Japan – comfortably represented a commanding share of global wealth. There was a natural association of liberal democratic institutions and economic success. Today, those seven nations’ combined GDP is down to 40% of the world total. The west is still rich, but it is no longer the world’s envied super league.Chinese money gives Europe commercial incentives that compete with its high-minded rhetoric on democratic values. China is Germany’s biggest export market. Smaller EU members have welcomed Chinese investment in infrastructure and businesses, although qualms are steadily growing about built-in political strings and security trapdoors. A huge Brussels-Beijing trade deal, signed last year (much to Washington’s dismay), is currently frozen as part of a tit-for-tat dispute over European criticism of Chinese human rights abuses.But EU governments simply don’t feel US levels of urgency to contain China. Geography is a factor – the US has a Pacific coast and strategic commitments to Taiwan, where Britain and France, for all their naval bravado, are little more than spectators. There is a conceptual difference too. As one diplomat puts it, Europe doesn’t like what China does, but the US doesn’t like what China is. The idea of the US being superseded as the paramount global power within the current century is existentially appalling for Washington.The Trump phenomenon compounds that anxiety for the current White House administration. It was a near-death experience for America’s constitutional order; an intimation of mortality for a political and economic model that looked insuperable at the dawn of the 21st century. The US president urges fellow western leaders to show strength in solidarity because the prospect of division, decline and the discrediting of democracy is more real than at any time in his five-decade Washington career.During that time, Biden has succeeded by patience, diplomacy and soft-spoken understatement. That style earns him a grateful audience in Europe, but the president’s manners should not be mistaken for mildness of purpose; the modest style is deployed in service of a tough message. He is not flying across the Atlantic to wallow in nostalgia for the alliances that won the first cold war. He is drumming up recruits for the second one. More
- in US Politics
A global agreement on taxing corporations is in sight – let’s make sure it happens
For more than four years, France, Germany, Italy and Spain have been working together to create an international tax system fit for the 21st century. It is a saga of many twists and turns. Now it’s time to come to an agreement. Introducing this fairer and more efficient international tax system was already a priority before the current economic crisis, and it will be all the more necessary coming out of it.Why? First, because the crisis was a boon to big tech companies, which raked in profit at levels not seen in any other sector of the economy. So how is it that the most profitable companies do not pay a fair share of tax? Just because their business is online doesn’t mean they should not pay taxes in the countries where they operate and from which their profits derive. Physical presence has been the historical basis of our taxation system. This basis has to evolve with our economies gradually shifting online. Like any other company, they should pay their fair share to fund the public good, at a level commensurate with their success.Second, because the crisis has exacerbated inequalities. It is urgent to put in place an international tax system that is efficient and fair. Currently, multinationals are able to avoid corporate taxes by shifting profits offshore. That’s not something the public will continue to accept. Fiscal dumping cannot be an option for Europe, nor can it be for the rest of the world. It would only lead to a further decline in corporate income tax revenues, wider inequalities and an inability to fund vital public services.Third, because we need to re-establish an international consensus on major global issues. The Organisation for Economic Co-operation and Development, with the support of our countries, has been doing exceptional work in the area of international taxation for many years. The OECD has put forward fair and balanced proposals on both subjects: the taxation of the profit of the most profitable multinationals, notably digital giants (Pillar 1), and the minimal taxation (Pillar 2). We can build on this work. For the first time in decades, we have an opportunity to reach a historic agreement on a new international tax system that would involve every country in the world. Such a multilateral agreement would signal a commitment to working together on major global issues.With the new Biden administration, there is no longer the threat of a veto hanging over this new system. The new US proposal on minimal taxation is an important step in the direction of the proposal initially floated by our countries and taken over by the OECD. The commitment to a minimum effective tax rate of at least 15% is a promising start. We therefore commit to defining a common position on a new international tax system at the G7 finance ministers meeting in London today. We are confident it will create the momentum needed to reach a global agreement at the G20 in Venice in July. It is within our reach. Let’s make sure it happens. We owe it to our citizens.
Nadia Calviño, second deputy prime minister of Spain, is the country’s economy minister. Daniele Franco is minister of economy and finance in Italy. Bruno Le Maire is France’s minister of economy, finance and recovery. Olaf Scholz is German vice-chancellor and minister of finance More - in US Politics
Queen to meet Joe Biden at Windsor Castle on 13 June
The Queen will meet Joe Biden when he visits the UK for the G7 summit later this month, Buckingham Palace has announced.The head of state will welcome the US president and the first lady, Jill Biden, to Windsor Castle on Sunday 13 June. Biden is due to attend the G7 gathering in Cornwall, which will be held in Carbis Bay from 11-13 June.The Queen met Biden’s predecessor, Donald Trump, when he made a state visit to the UK in June 2019, in the last days of Theresa May’s premiership.The president and first lady sent their condolences to the Queen after the death of the Duke of Edinburgh in April. The Bidens said they were keeping the royal family “in our hearts during this time”.Having taken up his post in the Oval Office, the coronavirus pandemic has limited opportunities for Biden to travel outside the US, so the G7 gathering will be his first foreign engagement in person.Buckingham Palace said in a short statement: “The Queen will meet the president of the United States of America and first lady Jill Biden at Windsor Castle on Sunday 13th June 2021.”There is speculation that the Prince of Wales and Duchess of Cornwall will also meet the couple at some point during their visit to the UK.There have been 14 US presidents during the Queen’s 69-year reign – from Harry S Truman to Biden. Biden will become the 13th American leader to meet the monarch – the only one the Queen did not meet was Lyndon B Johnson.After attending the G7 gathering, when world leaders are expected to discuss a range of issues from climate change to tackling the Covid-19 pandemic, Biden will head to Brussels to join a Nato summit.He is also scheduled to meet the Russian president, Vladimir Putin, in Switzerland on 16 June for talks on repairing relations between Washington and Moscow. More
- in UK Politics
Inside Politics: No 10 awaits ‘Dom bombs’ as Cummings set to spill secrets
Tributes have been paid to William Shakespeare, the man who made the headlines after becoming only the second person to get the Pfizer Covid vaccine. The “much-loved” 81-year-old has died of an unrelated illness. Covid, Shakespeare and octogenarians will be making the headlines for quite different reasons today. Dominic Cummings is ready to attack Boris Johnson and his government this morning, and is set to shed some light on whether the PM skipped crucial meetings to work on his Shakespeare book. He is also expected to tell MPs that Johnson claimed “Covid is only killing 80-year-olds”.Inside the bubblePolitical commentator Andrew Grice on what to look out for today: More
- in UK Politics
Inside Politics: Dominic Cummings ready to ‘napalm’ No 10, say allies
The Italians who won Eurovision have issued an outraged denial after video footage showed the band’s singer hovering a nostril over a table in the green room. “Please, guys – don’t say that,” the band said on drug claims. “We’re really shocked about what people are saying.” Boris Johnson’s government is outraged denial mode – ministers are really shocked about what Dominic Cummings is saying. The renegade’s allies say he’s ready to “napalm” No 10 this week with his claims on herd immunity and high-level incompetence. But does Cummings have anything really shocking to tell MPs?Inside the bubblePolicy correspondent Jon Stone on what to look out for today: More
- in UK Politics
Inside Politics: Angela Rayner emerges ‘more powerful’ from Labour reshuffle
We’ll start the week with a bit of family drama. Prince William and Prince Harry have reportedly “insisted” they give separate speeches when they unveil the Diana memorial statue this summer. “They won’t present a united front,” one royal source told the tabloids. The disunited Labour family are back at each other’s throats. You think they would have learned how to fight well by now. But no – they’re fighting ugly over the disastrous local elections and Keir Starmer’s chaotic reshuffle. Meanwhile, Boris Johnson is struggling to keep our disunited “family of nations” together. He has appealed to Nicola Sturgeon to work with him through the Covid crisis in the “spirit of unity”. But in truth, the spirit of unity doesn’t exist anymore.Inside the bubblePolicy correspondent Jon Stone on what to look out for today: More
- in US Politics
Targets like 'net-zero' won't solve the climate crisis on their own | Mathew Lawrence
Last week was a critical time in the global response to the climate emergency: the US vowed to cut its emissions by at least 50% by 2030, while the UK government committed to reducing emissions by 78% by 2035, relative to a 1990 baseline. Both announcements were important steps that reflected the significance of one particular tool in climate governance: the target. From the legally binding targets in the UK’s Climate Change Act (2008) to those of the 2015 Paris agreement, targets define a sense of direction and signpost of ambition. Alone, however, targets are not enough. We need more than just targets to transition to a post-carbon future. We need planning.Despite what free-market economists may suggest, markets are not “free”, nor do they emerge spontaneously. They are created and sustained by governments, laws and political institutions, which plan how they operate and whose interests they serve. What’s more, the global economy, far from being organised by the anarchy of competition, is itself structured by institutions with vast planning power. Targets may dominate the headlines, but it’s these institutions of planning that are central to the climate struggle.Central banks are at the apex of economic planning. The actions of central banks during the Covid-19 emergency, such as buying assets to stabilise turbulent financial markets and controlling interest rates, reflect the coordinating function they perform. Financial institutions, from banks to treasuries, also structure the global economy and plan our economic and environmental future by choosing which businesses and activities to invest in. Decisions about who gets liquidity and who doesn’t are the difference between a business living or dying, stagnating or thriving.These economic institutions all have a common theme. They are responsible for planning, and therefore bringing to life one particular version of the future that is accelerating environmental breakdown and stark inequality. The world’s biggest 60 banks, for instance, have provided $3.8tn of financing for fossil fuel companies since 2015. The Bank of England’s corporate bond holdings as of June 2020 are consistent with – and contribute towards – catastrophic average temperature increases of 3.5C above pre-industrial levels by 2100, and provide no-strings attached finance to carbon-intensive companies. These priorities are also reflected in the UK’s public policies; while the government has committed itself to climate targets, it still supports the development of fossil fuel extraction and carbon-intensive infrastructure, while providing inadequate support for low-carbon public transport or net-zero housing.Announcing new climate targets without rethinking how our global economy is planned can quickly amount to “greenwashing”. In 2018, the increase in fossil fuel production was more than three times higher than in renewables. Since then, fossil fuel giants have announced “net-zero” goals that still envisage a critical role for oil, gas and coal in 2100. In this way climate targets can give a green veneer to plans that merely continue the carbon-intensive status quo.The political challenge is to ensure that planning itself is more democratic and centred on meeting our needs and decarbonising our economy. To reach the UK and world’s climate targets, we’ll need to reimagine planning: the tools we use, the time horizons involved, the voices and values that shape these plans, and how they are enacted. This is not about centralising power in an unresponsive and overweening state, turning our futures over to algorithmic decision-making, or further concentrating corporate power. Instead, it’s about prioritising our ability to plan for the common good: in our homes, in our communities, and in a democratic economy, from workplaces and markets to the state.What might this look like? As John Maynard Keynes foresaw when he called for the steady socialisation of finance and the “euthanasia of the rentier” in 1936, investment should be organised by needs, rather than short-term profits. In our era of sustained economic stagnation, we can’t afford to wait for a revival of capitalist dynamism to trigger investment. Instead, governments should be coordinating a green industrial strategy and heavily investing to build the low-carbon infrastructures, industries and institutions we need. There is so much to be done, and yet current plans fall dangerously short; even Biden’s much-trumpeted infrastructure plan fails to deliver the levels of public investment needed to decarbonise at the pace and scale the climate emergency requires.If we’re to rethink how planning works, central banks will play a crucial role. By consciously embracing their planning function, central banks could steer societies toward rapid decarbonisation. They could do this through changing the relative cost of “green” versus “dirty” capital, for example, by enforcing higher capital requirements for carbon-intensive industries and guiding credit to low-carbon activities. They could also introduce new, socially just rules for carbon pricing that would ensure private investment is geared towards tackling the climate crisis.Part of rethinking planning will also involve rethinking the tools that are used to organise the global economy: the legal contracts, accounting and auditing processes, property claims and financial flows at the heart of it. Currently, these tools and processes are geared towards maximising short-term returns in an economy that excludes ordinary workers and communities from decision-making. We need to refocus these on securing social and environmental wellbeing.Targets are necessary, but they’re only half of the picture. In addition to setting ambitious goals, governments now need to decarbonise the global economy and democratise how it is planned and organised. Our economy isn’t a natural state, but a malleable creation. We still retain the power to reimagine what version of the future it is hurtling towards – and now we must urgently embrace this. More
