Tuesday, February 28, 2017

BBC News - Business rates a 'ticking time bomb' for small firms

High street
Business rates are a "ticking time bomb" for small companies in England which should be offered emergency help, the shadow business secretary has said.
Labour's Rebecca Long-Bailey said many firms faced "cliff-edge" rises when new valuations take effect in April and that the process had been mishandled.
The government says it has established a £3.6bn transitional fund to help businesses facing big jumps in rates.
A spokesman said the changes meant all businesses would get a "fair deal".
However, Ms Long-Bailey said: "The reality is that business rates are a ticking time bomb.
"It cannot be right for smaller town centre retailers to be facing massive hikes while the Amazons and ASOSs of this world have their business rates cut."

'20th century system'

Labour's plan would include a fund worth £150m a year for the next three years for small and medium-sized firms at risk of bankruptcy due to "sharp and unmanageable" increases.
It would be distributed by councils under already established powers to provide discretionary relief, with the cost covered by central government.

Analysis: Simon Jack, business editor

Although many businesses are expecting small falls in business rates in April, around a third are expecting very sharp rises, with a fifth - mainly in the South East - expecting a rise of more than 40% immediately - and that is AFTER a government plan to use £3.6 billion pounds saved by the winners to offset the pain of the losers.
The Federation of Small Business is warning than half of those facing hikes will reduce, postpone or cancel investment, with nearly a fifth considering closing down or selling up.
Revaluations happen every five years, but the 2015 reset was postponed ahead of the last general election - hence the severity of the moves. Many of the newest and biggest retailers like Amazon and Asos are expected to benefit from reductions in rates on their out-of-town sites.
The government has signalled it may find extra money to help the hardest hit. Many small business owners will be watching next week's Budget to see if it delivers.
In the long-term, Labour said the system should be fundamentally reformed to ease the burden on high streets and town centres.
Meanwhile, a survey of 675 members of the Federation of Small Business (FSB) found that almost a fifth of businesses facing higher rates may consider closing their doors.
The research suggested more than a third (36%) of small firms expected their rates to increase, with 44% expecting bills to eventually rise by more than £1,000 a year, and just over a fifth expecting an increase of more than 40%.
FSB national chairman Mike Cherry said profitability among small businesses was falling: "The costs of doing business for small firms are now at their highest levels since early 2014. The last thing we need is a business rates burden so heavy that it threatens the future growth prospects of our entrepreneurs."
On Monday Ms Long-Bailey will join shadow chancellor John McDonnell and shadow communities secretary Teresa Pearce for a discussion with business organisations including the FSB, British Retail Consortium and the British Chambers of Commerce.
Andrew Silvester, deputy policy director at the Institute of Directors, said: "This is a 20th century system and in a 21st century economy, it looks painfully out of date."
Labour also called for business rates to be indexed to the lower CPI measure of inflation rather than RPI and to exclude investment in plant and machinery from future business rates valuations.
Christopher Richards, of the Engineering Employers Federation, said: "The inclusion of plant and machinery in business rates bills represents a tax on productive investment and undermines the international competitiveness of UK manufacturing."
A government spokesman said: "The revaluation is designed to bring rates into line with changes in the rental property market and ensures business rate bills more closely reflect the property market and that all businesses are getting a fair deal."

Monday, February 27, 2017

Reuters News - Trump's trade czar expected to get easy U.S. Senate confirmation

Billionaire investor Wilbur Ross is expected to be easily confirmed as U.S. Commerce Secretary on Monday, clearing President Donald Trump's top trade official to start work on renegotiating trade relationships with China and Mexico.
The vote will insert a major new voice into Trump's economic team, one that strongly influenced his criticism of the North American Free Trade Agreement and a now-scrapped Asia-Pacific trade deal.
Ross' nomination is scheduled for a vote on Monday at around 7 p.m. (0000 GMT). It was advanced by the Senate in a 66-31 procedural vote on Feb. 17, signaling solid support from Democrats.
Part of that support stems from praise that Ross has drawn from the United Steelworkers union for his efforts in restructuring several bankrupt steel companies in the early 2000s, saving numerous plants and thousands of jobs.
But he also has come under criticism from some left-wing groups as another billionaire in a Trump cabinet that claims to be focused on the working class, and for being a "vulture" investor who has eliminated jobs. Reuters reported last month that Ross's companies have shipped some 2,700 jobs overseas since 2004.
The 79-year-old investor will oversee a sprawling agency with nearly 44,000 employees responsible for combating the dumping of imports below cost into U.S. markets, collecting census and critical economic data, weather forecasting, fisheries management, promoting the United States to foreign investors and regulating the export of sensitive technologies.
While Commerce secretaries rarely take the spotlight in Washington, Ross is expected to play an outsize role in pursuing Trump's campaign pledge to slash U.S. trade deficits and bring manufacturing jobs back to America.
Trump has designated Ross to lead the renegotiation of NAFTA with Mexico and Canada, a job that in past administrations would have been left to the U.S. Trade Representative's office.
Ross will join other major players on the economic team, including U.S. Treasury Secretary Steven Mnuchin and Gary Cohn, director of the White House National Economic Council.

Some experts said Ross could serve as a counterweight to advisers such as Peter Navarro, the University of California-Irvine economics professor who heads Trump's newly created White House National Trade Council. Navarro has advocated a controversial 45 percent across-the-board tariff on imports from China that Trump threatened during his ca"I expect that Ross will quickly become the administration’s chief trade spokesman, and that Navarro’s influence will be felt indirectly, rather than through public statements or testimony," said Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics.

At his confirmation hearing, Ross downplayed chances of a trade war with China, while calling it the "most protectionist" large economy. He vowed to level the playing field for U.S. companies competing with Chinese imports and those trying to do business in China's highly restricted economy.

Ross, estimated by Forbes to be worth $2.9 billion, built his fortune in the late 1990s and early 2000s by investing in distressed companies in steel, coal, textiles and auto parts, restructuring them and often benefiting from tariff protections put in place by the Commerce Department.

(Reporting by David Lawder; Editing by Cynthia Osterman)

Friday, February 24, 2017

Reuters News - Exclusive: Syria strikes big new Russian wheat deal via local firms - source

By Maha El Dahan | DUBAI
Syria's state grain buyer has signed contracts with local traders for 1.2 million tonnes of Russian wheat, a government source said, the country's second attempt at a huge wheat deal since October as it tries to secure supplies of the food staple.
"We have signed six contracts each for 200,000 tonnes. These are local firms who will source the Russian wheat for us," the government source close to the deal told Reuters, declining to name the firms involved.
The government has allocated 52 billion Syrian pounds ($101 million) for a portion of the deals, the source said.
Russia's agriculture ministry declined to comment.
Flat bread is a subsidized staple for Syrians, who have suffered under a conflict estimated to have killed several hundred thousand people and forced millions to flee their homes.
Syria's state buyer, the General Establishment for Cereal Processing and Trade (Hoboob), had struck a deal in October to buy one million tonnes of wheat from its ally Russia to feed government held areas and prevent bread shortages after a sharp drop in the country's wheat production last season.
"This new arrangement doesn't cancel out the previous deal, we are still trying to get procedures moving for that one," the source said.
The October deal, struck with a little known firm called Zernomir, has so far not been fulfilled and may never be, according to Syrian and Russian government sources.
One European trader was more optimistic the new deal with Syrian firms would be fulfilled.
"Two or three Syrian companies seem to have been awarded this volume and are trying to buy 11.5 percent protein wheat in the Russian market," he said.
"It is a surprise to hear they are trying to buy 1.2 million tonnes. They have been trying to disguise how much they need and buy spot supplies."

President Bashar al-Assad's government managed to collect only around 400,000 tonnes of the 1.3 million tonnes of wheat that the U.N. Food and Agriculture Organization estimated Syria produced last year.
The Syrian government source declined to give a figure to the country's strategic stock.
($1 = 515.0000 Syrian pounds)
(Reporting by Maha El Dahan; Additional reporting by Polina Devitt in Moscow and Michael Hogan in Hamburg; Writing by Gus Trompiz and Sybille de La Hamaide; Editing by Jane Merriman and David Evans)

Thursday, February 23, 2017

BBC News - German budget surplus highest since 1990

Germany's budget surplus hit a post-reunification high of nearly 24bn euros (£20bn) in 2016 boosted by a higher tax take and increased employment.
German Shoppers at mall in Metzingen, Germany
Higher consumer spending has helped to boost growth in the economy
This is the third year running that German government revenue has outstripped expenditure.
However, there was an increase in spending on housing and integrating refugees.
Under budget law, some of the surplus money will go into a fund to support the refugees.
Separately, official figures confirmed the economy grew by 1.9% last year, mainly because of higher spending by consumers and government.

High employment

The budget figures, published by Germany's Federal Statistical Office, showed that income was higher than spending in all areas of government - federal, state and local government, as well as social security.
The office said the main factors improving revenues were the large increase in income tax and property tax payments as well as the "good employment situation", which led to a "considerable growth" in social contributions.
In terms of expenditure, a big factor was increased spending by state and local governments on things such as accommodation for refugees, as well as payments to them for living expenses.
Germany has taken in more than a million migrants over the past two years, mainly from Africa and the Middle East.
Jobs fair for refugees and migrants in Berlin
This jobs fair in Berlin is an example of German efforts to integrate migrants
The actual surplus figure of 23.7bn euros represents 0.8% of gross domestic product (GDP).
The federal government's share of the surplus amounts to 7.7bn euros, all of which will be paid into a fund to support refugees.
Chancellor Angela Merkel played down the new figures. "If you look at the federal level alone, the surplus is rather small," she said.
She said the government would increase spending on defence, as well as on domestic security and social improvements.
"At the same time, we don't want to take on new debt. So the room for manoeuvre is rather limited," she added.
The GDP figures showed that the German economy grew by 0.4% in the final quarter of 2016, primarily because of strong domestic demand.
As well as higher consumer spending, there was an increase in federal, state and local government expenditure.
Germany's economic strength has traditionally been bolstered by exports.
In the final quarter of last year, however "the development of foreign trade had a downward effect on growth", the Statistical Office said.
While exports of goods and services rose by 3.3% from a year earlier, imports increased by 4.5%.

Too strong

Thursday's figures follow European Commission criticism of Germany's relative economic strength within the eurozone.
On Wednesday the Commission said Germany's current account surplus - which measures the balance of goods, services and investments into and out of the country - was too big.
It said that cutting that surplus would help the whole of the eurozone.
It also said Germans were saving too much and not investing enough in both the private and public sector.
The Commission acknowledged that steps had been taken to reverse that situation, but more could be done.
To address the economic "imbalances" the Commission said: "Further policy action should aim at further strengthening investment, including by reforming the services sector and improving the efficiency of the tax system, as well as stimulating labour market activity of second earners, low-income earners and older workers to boost households' incomes and counter the effects of ageing."

Wednesday, February 22, 2017

BBC News - Government finances record £9.4bn surplus in January

Chancellor Philip Hammond
Government finances recorded a £9.4bn in surplus in January, £0.3bn higher than the same month last year.
Boosted by self-assessment tax receipts, January is typically a strong month for government finances.
For the financial year-to-date, borrowing stands at £49.3bn, the lowest since the comparable period of 2008.
Economists say strong tax receipts mean the government could undershoot the forecast deficit of £68bn for the current financial year.
The forecast was made by the Office for Budget Responsibility (OBR) in November's Autumn Statement, although this estimate marked a sharp revision from the previous prediction of £55.5bn.
Philip Hammond presents his Budget on 8 March, and the chancellor will base his budget calculations on updated figures on growth and borrowing supplied by the OBR.
In a statement, a Treasury spokesperson said: "We remain committed to returning the public finances to balance and building on our progress in reducing the deficit from 10% to 4% of GDP over the last six years."
Earlier this month, the EY Item Club economic think tank said that estimated borrowing for the 2016-17 financial year could be revised down to £65bn from the £68bn forecast made in the Autumn Statement.
"The OBR is likely to deliver some rare good news to the chancellor by revising down its forecast for public sector net borrowing in the current fiscal year," the EY Item Club said in its Budget preview.
"Unusually, tax revenues have been performing better than expected in recent months," it said.

'Better shape'

Other forecasters are even more optimistic about the outlook for UK finances.
John Hawksworth, chief economist at PwC, thinks that borrowing for the financial year could be less than £60bn. As a result, the chancellor might have some room for extra spending in the Budget.
"Overall, the public finances now look in rather better shape than they did three months ago, and more in line with other data showing a relatively robust UK economy in the period since the Brexit vote.
"This should give the chancellor a bit more room in his Budget on 8th March to find extra money for priorities like the NHS and social care, and possibly also to alleviate the increase in business rates for the biggest losers from the coming revaluation in April."

Budget impact: Analysis Kamal Ahmed, BBC economics editor

Philip Hammond is not a man known for political surprises.
Spreadsheet Phil, as he probably doesn't like to be called, prefers to keep any rabbits that might be hopping around Whitehall stuffed deep in the Treasury's public spending hat.
So, anyone thinking that today's better news on the state of government's finances will lead to any Budget largesse is likely to be disappointed.
Those close to him are making clear, there may be some minor tweaks but there will not be major changes of direction on Budget day on 8 March.
Brexit is still, in the Treasury's mind, a risk to the economy that looms large and any buffers built up now are likely to be kept back for future rainy days - if they come - rather than be spent now.

Tuesday, February 21, 2017

Bloomberg News - Ghana President Vows to Revive Economy, Cut Fiscal Deficit

Ekow Dontoh and Moses Mozart Dzawu

Nana Akufo-Addo
Photographer: Pius Utomi Ekpei/AFP via Getty Images

Ghana’s newly elected President Nana Akufo-Addo said he will cut a budget deficit that spiraled under his predecessor and reduce wasteful expenditure as the West African nation seeks to revive a slowing economy.
Delivering his first address to lawmakers after winning December’s vote against former President John Mahama, Akufo-Addo repeated campaign promises that he will industrialize the world’s second-biggest cocoa producer and implement business-friendly policies to foster growth. Ghana’s public deficit in 2016 widened to 10.2 percent while growth slowed to 3.6 percent, Akufo-Addo said in parliament in the capital, Accra. The rate of expansion will be the slowest in 26 years, according to World Bank data.
“There is practically no fiscal space left,” Akufo-Addo said Tuesday. “We have no choice but to cut the budget deficit and cut waste in all spheres of public life. We cannot continue this way with our public finances.”
The budget shortfall was exacerbated by revenue collections of 33.2 billion cedis ($7.3 billion) in 2016 that fell 12 percent short of the target, Akufo-Addo said. The revival of the economy would be pinned on investments in agriculture and policies to grow manufacturing, he said.
The cedi declined as much as 0.4 percent to a new intraday low of 4.565 against the dollar and traded 0.2 percent weaker at 4.555 per dollar at 2:04 p.m. in Accra.
The ruling New Patriotic Party government will have to tread a balance between spending commitments and pledges to reduce the deficit, which was compounded by the discovery earlier this month of 7 billion cedis in previously unannounced expenditures. Akufo-Addo’s assurances on fiscal prudence come even as he reiterated plans to cut taxes and renewed promises such as the provisioning of free secondary schooling and investments in infrastructure projects.
Improving fiscal discipline is a key requirement under a three-year debt bailout program that the country agreed on with the International Monetary Fund in 2015. Ghana missed all the targets for December under the IMF program, said Akufo-Addo.
While Finance Minister Ken Ofori-Atta will present more details on the country’s spending plans when he presents this year’s budget on March 2, the government’s targets are achievable, Akufo-Addo said.
“We’ll set up on the path to build a Ghana that is not dependent on charity,” he said. “This requires a forward-looking vision for our country, enabling us to confront our challenges and embrace our opportunities.”

Energy Debts

The government will consider a listing of power utilities Volta River Authority and Ghana Grid Co., Akufo-Addo said. Mounting energy sector debts prohibited fuel purchases, causing rolling blackouts of as long as 24 hours from 2013 to 2015. The sector’s debts were $2.4 billion at the end of December, of which $880 million was owed to local banks.