Posts

AIR PHOTO

Theresa May pledges Africa investment boost after Brexit

In a speech in Cape Town, Theresa May pledged £4bn in support for African economies, to create jobs for young people.

She also pledged a “fundamental shift” in aid spending to focus on long-term economic and security challenges rather than short-term poverty reduction.

She will also visit Nigeria and Kenya during the three-day trade mission.

On her way to South Africa, the prime minister played down warnings from the chancellor about the economic damage a no-deal Brexit could cause.

Talking to journalists on board RAF Voyager on Tuesday morning, Mrs May reiterated that she believed a no-deal Brexit was still better than a bad deal – adding no-deal “wouldn’t be the end of the world”.

Last week Chancellor Philip Hammond warned in a letter that a no-deal Brexit could damage the economy.

Mrs May’s trip – which will see her meet the presidents of all three countries – aims to deepen economic and trade ties with growing African economies ahead of Britain leaving the EU in 2019.

Arriving in South Africa on Tuesday morning, Mrs May said she wanted the UK to overtake the US to become the G7’s biggest investor in Africa by 2022.

She promised to continue existing economic links based on the UK’s EU membership – including an EU-wide partnership with the Southern African Customs Union and Mozambique – after Brexit next year.

Promising an extra £4bn in direct UK government investment – which she expects to be matched by the private sector – she said while the UK could not match the “economic might” of some foreign investors – such as China or the US – it offered long-term opportunities of the “highest quality and breadth”.

She defended the UK’s aid spending in Africa, a target of criticism from some Tory MPs, saying it had “worked” to give millions of children and women an education and immunise millions against deadly diseases.

But she said she was “unashamed” that it had to work in the UK’s own interest and pledged a new approach in future, focusing on helping British private sector companies invest in fast-growing countries like Cote D’Ivoire and Senegal while “bolstering states under threat” from Islamist extremism such as Chad, Mali and Niger.

“True partnerships are not about one party doing unto another, but states, governments, businesses and individuals working together in a responsible way to achieve common goals,” she said.

The UK’s overseas aid budget totalled £13.9bn in 2017, an increase of £555m in 2016.

UK direct investment in Africa was £42.7bn in 2016, compared with £44.3bn from the US, £38bn from France and £31bn from China, according to data from the United Nations Conference on Trade and Development.

Budget aim to help UK ‘seize opportunities’ from Brexit

The UK must “seize the opportunities” from Brexit while tackling deep-seated economic challenges “head on”, Philip Hammond is to say in his second Budget.

The chancellor will promise investment to make Britain “fit for the future” as an “outward looking, free-trading nation” once it leaves the EU in 2019.

But he will also commit to supporting hard-pressed families with the cost of living and address housing shortages.

Labour say he should call time on austerity and boost public services.

In his Commons speech, which will begin at about 12:30 GMT, Mr Hammond will set out proposed tax and spending changes.

He will also update MPs on the current state of the economy, future growth projections and the health of the public finances.

He has been under pressure in recent months from sections of his party who argue that he is too pessimistic about the UK’s prospects when it leaves the EU.

In response, he will set out his vision for the UK after Brexit as a “prosperous and inclusive economy” which harnesses the power of technological change and innovation to be a “force for good in the world”.

Unlike past years, few announcements have been briefed out in advance of the big day.

But the chancellor is expected to announce more money for teacher training in England and extra cash to boost the numbers of students taking maths after the age of 16.

He has signalled he wants to speed up permitted housing developments and give more help to small builders.

In a nod to younger voters, discounted rail cards will be extended.

An extra £2.3bn for research and development and £1.7bn for transport links are designed to address the UK’s lagging productivity.

Extra money is also expected to be found for new charge points for electric cars and for the next generation of 5G mobile networks.

Expect the theme of innovation to ring through the speech, with Mr Hammond hailing the UK as being “at the forefront of a technological revolution”.

The image Mr Hammond has cultivated as a safe, unflashy pair of hands in uncertain times – hence his ironic “box office Phil” nickname – was dented in the March Budget when he had to backtrack on plans to hike National Insurance for the self-employed.

Asked on Sunday whether this would be a bold or boring Budget, he settled for describing it as “balanced”.

While some Tory MPs would prefer a safety-first approach with no controversy, others want him to turbo-charge efforts to prepare the UK for life after Brexit.

Most hope he will begin to address issues perceived to have hurt the Tories at the election, such as the financial pressures on public sector workers and young people.

In remarks released ahead of the speech, Mr Hammond strikes an upbeat tone, saying he will use the Budget to “look forwards, embrace change, meet our challenges head on and seize the opportunities for Britain”.

Yes, that’s the way it’s been for the last twenty years. The last one was in March and normally there wouldn’t be another one until Spring 2018.

But Mr Hammond thinks late autumn is a more suitable time for tax and spending changes to be announced and scrutinised before the start of the tax year in April. So from now on, Budgets will take place in November.

But aside from the timing, the choreography of Budget day will remain the same.

Mr Hammond will be photographed in Downing Street holding the famous red ministerial box – used to carry the statement – aloft before making the short journey to the Commons.

While tradition dictates he can take a swig of his chosen tipple during his speech, Mr Hammond is expected to eschew anything too strong and confine himself to water during what is normally an hour-long statement.

Quite a lot. In the last nine months, the UK has triggered Brexit and begun negotiations on the terms of its departure from the EU.

Economic conditions have changed too, although there is fierce debate about how much of this is attributable to uncertainty and negativity over Brexit.

Inflation has risen to 3%, its highest level in five years, while growth has faltered a little.

However, borrowing levels are at a 10-year low, giving Mr Hammond more flexibility, while employment remains at record levels.

The political backdrop has also changed enormously.

The loss of their majority in June’s election sparked fresh Brexit infighting within the Conservatives.

The government has the backing of the DUP, but Mr Hammond – who is distrusted by many on the right of the party – does not have unlimited political capital in the bank.

Brexit: UK ‘ready to pay more to the EU’

Brexit supporters in the cabinet have agreed the UK should offer to pay more money to the EU as it leaves.

But no formal offer will be made until the EU agrees to begin talking about a new trade deal with the UK.

No new figure has been given – but it is thought it could be up to £40bn, which would be double what the UK’s offers so far add up to.

The UK and the EU have yet to agree on the so-called “divorce bill” with the UK due to leave the EU in March 2019.

Some Conservative MPs have reacted angrily to the possibility of the UK agreeing to pay more – yesterday one, Nigel Evans, said it would be like a “ransom payment” to the EU while another, Robert Halfon, said it would make voters “go bananas”.

But despite this, BBC assistant political editor Norman Smith said leading Brexiteers in Theresa May’s cabinet, like Boris Johnson and Michael Gove, had agreed to support her in paying a “much larger sum” – as long as the EU agrees to begin trade talks, which it has refused to do so far.

And no final figure will be agreed until a trade deal is agreed, he added.

The UK voted to leave the EU in June 2016, and served the EU with formal notice of Brexit in March 2017. This began a two-year countdown to the UK’s departure day which will be in March 2019.

Before that the two sides have to agree all sorts of things – including what happens to EU citizens living in the UK and British people living in the EU, and how the Northern Ireland border will work.

So the two teams of negotiators have been meeting in Brussels every month.

But there has not been much of a breakthrough so far, with the “divorce bill” proving to be one of the key sticking points.

Part of the problem for Theresa May is that while the EU wants the UK to offer more money, some of her MPs say this would be unacceptable and that the UK should just walk away and leave.

EU leaders are due to decide at a summit on 14 and 15 December whether to allow talks on a future trade relationship to begin.

It was billed as a key meeting where Theresa May would try to get her ministers on side to support her in negotiating cash with the EU.

Downing Street has been tight-lipped about what was actually discussed at the Cabinet Exit and Trade (Strategy and Negotiations) sub-committee, chaired by Prime Minister Theresa May.

But the BBC understands ministers concluded there is the possibility that talks with the EU will move on to the next phase in December but “we are not going to move on our own”.

There were also tensions over the future role of the European Court of Justice.

Some believe the court will need to supervise the trading rules between the UK and EU during a period of transition after Britain leaves.

Chancellor Philip Hammond has floated the idea of a tribunal, similar to the arrangements in place in European Economic Area countries such as Norway, to settle any disputes.

But the EU may insist on a continued role for the European Court of Justice.

The EU says the UK needs to settle its accounts before it leaves. It says the UK has made financial commitments that have to be settled as part of an overall withdrawal agreement.

The UK accepts that it has some obligations. And it has promised not to leave any other country out of pocket in the current EU budget period from 2014-20.

But the devil is in the detail.

There are also issues like pensions for EU staff, and how the UK’s contribution to these is calculated for years to come, and the question of what happens to building projects – for instance in Spain – that had funding agreed by all EU members including the UK but which will only begin construction after the UK has left.

Large amounts of the EU’s budget are spent in two areas – agriculture and fisheries, and development of poorer areas.

Projects include business start-ups, roads and railways, education and health programmes and many others.