Government ‘Guarantee’ post-EU funds after Brexit occurs

SOURCE: BBC

It has been announced today that EU funding, which the UK receives as a member that will consequently be lost after Brexit occurs, given to organisations involving farming, scientists and others, will be replaced by the Treasury, Chancellor Philip Hammond has said.

Brexit could cost up to £6bn a year in losses of funding, but the Treasury will guarantee to back EU-funded projects signed before this year’s Autumn Statement.

The BBC have stated that agricultural funding which is now provided by the EU will also continue until 2020.

However, critics said the guarantee does not go far enough and there was ‘continued uncertainty’.

Voters ultimately backed to leave the EU in the 23 June referendum by 3.8%, but Prime Minister Theresa May has indicated the UK government will not trigger Article 50, which would begin a two-year process to leave, during 2016.

Furthermore, Mr Hammond has said “EU structural and investment fund projects signed before the Autumn Statement later this year, and Horizon research funding granted before leaving the EU, will be guaranteed by the Treasury after the UK leaves.”

The BBC have also said ‘the EU’s 80bn euro (£69bn) Horizon 2020 programme awards funding for research and innovation and is open to UK institutions while the country remains a member.’

The chancellor responded to critics by saying the government was “determined to ensure that people have stability and certainty in the period leading up to our departure from the EU”.

The Treasury said it would assess whether to guarantee funding for certain other projects “that might be signed after the Autumn Statement, but while we remain a member of the EU”.

Currently, farmers receive subsidies and other payments under the EU’s Common Agricultural Policy (CAP).

It’s said that they get about £3bn a year in subsidies, with the biggest farmers pocketing cheques of £1m. The grants are given for owning land and also taking care of wildlife.

The National Farmers’ Union (NFU) said the Treasury’s announcement was “positive” for farming.

Other examples of projects that have received, or are due to receive regional development fund money, include:

  • £5m for the Graphene Engineering Innovation Centre at the University of Manchester
  • £9m for the manufacturing growth programme to support areas in the Midlands, Yorkshire and the Humber and the East of England
  • £3m for a new life sciences incubation and innovation centre at Porton Down in Wiltshire

(BBC 2016)

Reportedly, the UK currently pays money into the EU budget, which will stop once it formally leaves.

In 2015 the UK Government paid in £13bn; EU spending on the UK was £4.5bn, meaning the UK’s net contribution was estimated at about £8.5bn, or £161m a week.

The UK private sector receives a further £1-1.5bn annually in EU funding.

What do you make of the Governments post-EU promisees?

Is the affordable for the UK to do? Will this mean Taxation and further Austerity cuts? Are these promises realistic?

Comment below your views on the post-EU funding plans

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The UK interest rates are cut to 0.25%

SOURCE: BBC

It was announced recently that the UK interest rates have now been cut from 0.5% to 0.25% by the Bank of England, which is a record low and the first cut since 2009.

Furthermore, the Bank of England has also signalled that rates could go lower if the economy worsens.

The BBC have stated that the Bank of England has also announced that ‘additional measures to stimulate the UK economy, including a £100bn scheme to force banks to pass on the low interest rate to households and businesses.’

It’s said that it will also buy £60bn of UK government bonds and £10bn of corporate bonds.

Governor Mark Carney said there was scope to cut the interest rate further.

He said that a majority of the nine-member Monetary Policy Committee (MPC) backed another cut if subsequent data showed the economy was deteriorating.

The governor additionally stated that banks have ‘no excuse’ not to pass on the lower borrowing costs to customers and will be charged a penalty if they fail to do so.

“The MPC is determined that the stimulus the economy needs does not get diluted as it passes through the financial system” – Governor Carney.

The Bank also announced the biggest cut to its growth forecasts since it started making them in 1993.

It has reduced its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.

Mr Carney that the decision to leave the EU marked a ‘regime change’ in which the UK would “redefine its openness to the movements of goods, services, people and capital”.

How will the Interests rates effect you?

Here is a link  by the BBC that runs over a few things.

Here is a breakdown to what they think.

Mortgages

They claim that a mortgage is by “far the biggest debt taken on by the majority of households in the UK.”

It’s said that an estimated ‘11.1 million households have one.’ The typical amount still left to pay on each home loan in the UK is £116,000, according to the Council for Mortgage Lenders.

Some Banks have quickly announced that they would “pass the cut on in full from September, with others expected to follow suit.” The BBC have also said that a “separate scheme announced by the Bank – called the Term Funding Scheme – is designed to ensure that banks pass on the rate cut.”

There are those on fixed rate mortgages – equating to nearly half (46%) of all mortgage holders.

They will see no change. However, if their mortgage term is up soon, they may find they pay less if and when they sign up to a new one. Fixed mortgage rates on new deals have been falling – even when there was no change to the Bank rate.

An increasing number of people have signed up to longer term fixed rate deals – locking them in for up to 10 years. For them, this change is fairly irrelevant.

Savings

The BBC supposedly say that the theory of a Bank rate cut is that “consumers see a cut in their mortgage bill, and a worsening return on their savings, so they go out and spend.” Hence, there is a boost to the economy and the same goes for businesses who will be more minded to invest.

That is the relatively simplistic explanation but it does make it clear that a Bank rate cut is bad for savers.

So overall as an example, “for anyone with £10,000 saved in such an account, they will receive £40 a year in gross interest, which is £25 less than before the cut.”

Pensions

The Bank of England also added further stimulus measures to the rate cut – namely, the purchase of government and corporate bonds. So as the BBC state, this will have no effect on the state pension.

It will, however, add extra pressure on the deficits facing defined benefit pension schemes, such as final-salary pensions, putting increased pressure on businesses to plug that gap or reduce the availability of such pensions.

Holiday money

The decision by the Bank of England has led to a fall in the value of the pound, meaning exchange rates will be more expensive.

What do you make of the BBC’s articles and the interest rate cuts?

Is this all due to the aftermath of Brexit? Will cutting interest rates help stabilise the economy? Do you think that interest rates will fall further?

Comment below your views on the interest rates cut and the BBC’s articles below

Top bosses move to back Remain ahead of EU vote

Source: BBC

In an article by the BBC, it’s reported that top bosses including Sir Richard Branson, the Premier League chair and car industry executives have backed Remain ahead of Thursday’s EU vote.

Football:

Premier League chair Richard Scudamore said the 20 clubs in the top tier wanted to remain and that leaving would be “incongruous” in the context of the league’s commitment to “openness”.

Mr Scudamore further stated in a BBC Radio 5 live interview that leaving would be “incongruous” in the context of the league’s commitment to “openness”.

“There is an openness about the Premier League which I think it would be completely incongruous if we were to take the opposite position,” he said.

Entrepreneurs: 

Meanwhile, Sir Richard Branson has warned a British exit from the EU would be “devastating” for the UK’s long-term prosperity.

Sir Branson, who has long backed the Remain campaign, wrote an open letter, recalling “how difficult it was” for businesses to operate effectively before the EU, adding he was “saddened” at the prospect of returning to those days.

Car Industries:

Car industry trade bodies and the Society of Motor Manufacturers and Traders’ (SMMT), warned leaving the EU would increase costs and threaten jobs.

“Remaining will allow the UK to retain the influence on which the unique and successful UK automotive sector depends,” said chief executive Mike Hawes.

Directors at Toyota UK, Vauxhall, Jaguar Land Rover and BMW, as well as from component makers GKN and Magal Engineering, also voiced their support.

Soft Drinks Companies:

Drinks giant Diageo’s chief executive Ivan Menezes wrote to the company’s 4,773 UK employees, telling them that it would be “better for the UK, better for Diageo and better for the Scotch whisky industry that we remain in”.

Mr Menezes said Diageo benefited from ease of access to the European single market, as well as trade deals that the EU had negotiated with the rest of the world.

Backlash?

John Longworth, chair of Vote Leave business council, said the UK would be better off outside the EU.

“The single market isn’t a nirvana, it’s a mirage. The single market’s a protectionist area.

What do you make of this recent report?

Will this effect the voting polls knowing major Companies/individuals are remain minded? Can Vote Leave tackle the issues that these global companies/individuals are saying? How will the referendum turn out on the 23rd, a remain or leave result?

Comment Below YOUR views on Stronger In’s backing companies/individuals views. 

 

IMF says EU exit ‘largest near-term risk’ to British economy

Source: BBC

In a recent BBC business article, the International Monetary Fund (IMF) has warned that a ”UK exit from the European Union (EU) could mean the UK misses out on up to 5.6% of GDP growth by 2019”

They (IMF) further state that a Brexit is the “largest near-term risk” to the UK economy, during the IMF’s annual UK economic outlook.

It added during the gathering that the “net economic effects would probably be ‘negative’ and ‘substantial.”

However, the Economists for the Brexit campaign state the “consensus that a UK exit would be bad for the economy was ‘based on flawed EU-centric models’.”

The IMF advisedly say that under its least adverse scenario for Brexit, by 2019 UK GDP would be 1.4% below what it would be should the UK vote to stay in the EU.

Its most adverse Brexit scenario predicts 2019 growth 5.6% below what it would otherwise have been, and also a drop in GDP in 2017 of 0.8%, which an IMF official described as a “recession”.

Under this scenario the UK would return to GDP growth of 2.9% in 2021. But the UK would have missed out on 4.5% of growth by then, according to the IMF.

‘Substantial Brexit costs’

Following a Brexit, the IMF finally said the UK would have to negotiate new trade terms with the EU if it wanted to stay in the single market.

If not, the UK could rely on World Trade Organisation rules, but this would ‘significantly raise trade barriers’, believe the IMF.

What do you make of the IMF brexit warning? Will the UK suffer economic consequences if it were to leave the EU? Will Brexit be able to negotiate trade deals quickly? 

Comment below YOUR views of the IMF’s Brexit warning 

Queen’s Speech: The Key Points

Source: The Guardian

As many know, the Queen has recently informed the nation of the new parliamentary business agenda for the foreseeable year coming, in front of parliament itself.

Within the article, its states that the Prime Minister David Cameron has described the speech as a “One Nation Queen’s Speech from a progressive, One Nation, Conservative Government”, using the opportunities presented by Britain’s strengthening economy to increase life chances for the most disadvantaged.

Below are some of the key points highlighted from the queens speech:

  • High speed broadband: The rights for families to have automatic compensation if their broadband fails is proposed, under measures announced in the Queen’s speech.
  • British Bill of Rights: David Cameron risks a major row with opposition MPs and civil liberties organisations, by trying to push ahead with plans for a new ‘Bill of Rights’. Furthermore, the Government will publish proposals for a British Bill of Rights, arguing that it will restore “common sense” to human rights legislation.
  • Better Bus services: The Bus Services Bill will give elected mayors powers over buses nationally.
  • Education and Young People: Currently, councils are responsible for moving pupils who have been excluded from school into other arrangements but there are concerns that this leads to students being forgotten about. Now schools will consequently be responsible for this themselves and the hope is it will lead to specialist centres being set up to help pupils back into mainstream education.
  • Justice and Prisons Reforms: Prisons will have to compile data on education and reoffending under a new drive for openness.
  • Sugar Tax: A new tax on sugar-rich fizzy drinks will be introduced from April 2018.

These are the key factors that ThePoliticsView has chosen from the Guardians article, however many additional factors were covered in the Queens speech that are also a major part of the Governments new agenda, including:

  • Tackling Extremism
  • International Development
  • National Security
  • National Citizens Service
  • Spaceports, Driverless Cars and Drones
  • NHS
  • Pensions and Savings
  • Welsh Devolution Settlements

What did you make of the Queens Speech?

Is their enough depth to the new Agenda? Will it be carried out successfully by the Government? What’s the biggest issue to address first on the Agenda? What do you disagree with most about the Agenda?

Comment YOUR views about the Queens Speech and the New Governnment Agenda below

New global rules on firms’ tax disclosure urged by economists

Source: BBC

The BBC have reported that ”new global rules forcing companies to report taxable activities country-by-country publicly have been called for by a group of 300 prominent economists.”

”In a letter to world leaders, the group urges the UK to “take a lead” in the push for more tax transparency. Poor countries are the biggest losers from tax havens, they claim.”

Furthermore, ”the letter comes ahead of the UK government’s anti-corruption summit on Thursday, which politicians from 40 countries as well as World Bank and IMF representatives are expected to attend.”

Who are these Economists?

”The economists – who include almost 50 professors from British universities – argue the UK’s position as summit host as well as its sovereignty over what it says is a third of the world’s tax havens makes it “uniquely placed” to take the lead.”

What are these new tax disclosures? 

One of the signatories, the economist Dr Ha-Joon Chang of the University of Cambridge, told the BBC that he signed the letter because he shared “the view that tax havens serve no useful purpose”.

Dr Chang said: “These tax havens basically allow companies and certain individuals to free-ride on the rest of humanity.”

“These companies and people make money in one country by using workers educated with public money, using roads, ports and other infrastructure paid for by the taxpayers of that country and moving the money to another country in a shell company which doesn’t really do any business there.”

What’s your view on this newly proposed Tax regime?

Will it be useful for the global economy? Will it create a better system of taxation? Will it potentially decrease the levels of fraud?

Comment below your views on this Tax proposal below

David Cameron’s father was allegedly part of the Mossack Fonseca clients

Source: BBC, BBC, The Guardian, International Consortium of Investigative Journalists

Its reported that a ‘huge leak’ of confidential documents (around 11 million documents), has revealed how the rich and powerful use tax havens to hide their wealth.

According to the BBC, Prime Minister David Cameron has ”called for greater transparency in tax havens and a clampdown on aggressive tax avoidance and evasion.” However, specific documents leaked from one of the world’s biggest offshore specialists, Mossack Fonseca, reveal that his ”late father used one of the most secretive tools of the offshore trade after he helped set up a fund for investors.”

Panama Papers – tax havens of the rich and powerful exposed

The BBC, The Guardian and the ICIJ, have further outlined the following:

  • Eleven million documents held by the Panama-based law firm Mossack Fonseca have been passed to German newspaper Süddeutsche Zeitung, which then shared them with the International Consortium of Investigative Journalists. BBC Panorama and UK newspaper the Guardian are among 109 media organisations in 76 countries which have been analysing the documents. The BBC does not know the identity of the source
  • They show how the company has helped clients launder money, dodge sanctions and evade tax
  • Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing

The leaked documents supposedly show that the prime minister’s father, who died in 2010, was one of five UK directors who flew to board meetings overseas.

There were also three directors in Switzerland and three in the Bahamas to help ensure the fund would not have to pay UK tax.

What’s your view of the Panama Papers?

Will the Papers disclose important information that can upset a range of countries based on tax avoidance? Will there be a major investigation to do with types of fraud and tax evasion? What will be the consequences for those who are found to of been in wrong-doing? Will David Cameron himself be affected heavily by this?

Comment YOUR VIEWS below in the comment section

George Osborne Budget Speech: Full Transcript

Source: The Mirror

The Mirror online has published a full transcript of George Osborne’s 8th budget announcement.

Within it states that George Osborne quoted:

I (George Osborne) report on an economy set to grow faster than any other major advanced economy in the world.”

”I report on a labour market delivering the highest employment in our history.”

”And I report on a deficit down by two thirds, falling each year and – I can confirm today – on course for a budget surplus.”

”The British economy is resilient because whatever the challenge, however strong the headwinds, we have held to the course we set out.”

Do you agree? What are your views of George Osborne’s New Budget outline? Will it be beneficial to the British Society and Economy?

Comment Below your views

SNP will implement new taxation powers to ensure Scotland’s lowest earners get ‘a better deal’

Source The Daily Record

The Daily Record quote within an article that ”SOCIAL Justice Secretary Alex Neil has said new income tax powers coming to Holyrood in 2017 will be used to give Scotland’s lowest earners “a better deal”, indicating tax rises for those who earn the most.”

The Daily Record expand further to say ”He has already hinted at tax rises for the rich, stating he is in favour of “progressive taxation”, while the SNP backed restoration of the 50p top rate of tax at the general election.”

Whats your view of this? Will this ‘progressive taxation’ make a better tax society within Scotland? Would this be an effective taxation policy? Does this further a statement that Scotland are becoming more independent as time goes on, also considering the dominant SNP election results in 2015 within Sottish constituencies, although Scotland voted to stay within the UK?

Comment Below your view

George Osborne’s Autumn Statement speech in full

Source: Finical Times

What’s your view on this? From reading the Financial Times article above, Is George Osborne demonstrating the right views, to ”protect our economic security, by taking the difficult decisions to live within our means and bring down our debt.”

Comment Below