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One more chance to shine for a slightly tarnished Rishi Sunak | Business

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Rishi Sunak will face his sternest test this week when he stands up in parliament to outline the latest post-coronavirus economic recovery plan. Billed as a major part of the government’s post-Dominic Cummings reboot, the spending review will set out the budget limits for departments across Whitehall over the next financial year.

More than that, the chancellor will be under pressure to show how the government’s “levelling-up” agenda to boost northern towns and cities will translate into actual projects, and what an infrastructure revolution means in practice.

But with the government’s health advisers concerned that an easing of lockdown rules at Christmas will bring further restrictions in the new year, the chancellor must somehow project confidence that his plans will boost jobs and help the economy grow again – and without setting limits that force him into another U-turn.

His last major appearance at the Commons dispatch box, on 5 November, was full of embarrassing climbdowns. Sunak ditched his “winter plan” and increased support for businesses, employees unable to work and self-employed workers, after it became clear that further Covid restrictions would end hopes of a V-shaped recovery.

In a major climbdown, Sunak said the Treasury would extend the furlough scheme to run for a full year by continuing to pay 80% of temporarily laid-off workers’ wages until 31 March. The chancellor also announced an expansion in funding for self-employed workers from November to January, in a speech that contrasted with his insistence in September that it was “fundamentally wrong to hold people in jobs that only exist inside the furlough”.

24 September
The chancellor announces the “winter economy plan” to replace the job retention scheme (JRS), which was introduced in March and covered 80% of the wages of temporarily laid-off workers. Commonly known as the furlough scheme, at one point the JRS supported more than 9 million employees.

Rishi Sunak says it will be replaced by a German-style wage subsidy programme to cover two-thirds of wages for staff working shorter than usual hours. Known as the job support scheme (JSS), it offers to cover 33% of pay and employers would contribute 33%. It was designed to replace the JRS from 1 November.

Sunak also announced an extension in the self-employed income support scheme (Seiss), offering to cover 20% of average monthly profits between November and January.

9 October
Sunak announces additional support for businesses forced to close their doors. The furlough replacement becomes a two-pronged system: JSS: open and JSS: closed. The latter is designed to pay 67% of wages without employer contributions. Bigger cash grants are also announced for businesses required to close.

22 October
Sunak is again forced to tweak his plan. Amid rising pressure from rebellious northern Tory MPs and a rapidly deteriorating economic outlook, the chancellor drastically cuts the level of employer contribution on the JSS: Open to 5%, from 33% previously.

He also launches new grants scheme for businesses hit by local lockdowns, with cheques worth up to £3,000 a month made available. He also doubles the level of support on Seiss to 40% of trading profits.

31 October
Boris Johnson’s decision to launch a four-week lockdown in England comes with an extension of furlough UK-wide to cover the period. It is announced just five hours before furlough is due to end.

2 November
Sunak moves to give self-employed workers similar support, doubling the support to 80% of trading profits – the same level as it had been in the first lockdown. He also extends the deadline for state-backed business loans until 31 January.

5 November
The chancellor extends the furlough scheme until 31 March, covering 80% of workers’ wages. Support for the self-employed is also increased from November to January to a similar level.

Treasury officials say their boss needed to stay nimble while the path of the virus was uncertain, and that that is what he has done over the past eight months.

Another view can be found outside No 11 Downing Street, among business leaders, trade unions and thinktanks. They mostly praise the chancellor for recognising in March that 10 years of austerity had stripped the welfare state of most automatic support mechanisms and that the economy was therefore in need of unprecedented special measures to protect businesses and livelihoods. This praise has evaporated in the months after the first lockdown and now they have a common grievance – that the chancellor “fell behind the curve” during the summer.

Make UK, the main organisation representing British manufacturers, said that while businesses were generally supportive of No 11’s efforts, “the Treasury has not offered the kind of support for specific industries found in France and Germany, where carmakers and the aerospace industry have benefited”.

A spokesman added: “Businesses are telling us that they can’t see a plan, that the strategy is missing, that ministers tack this way and that without a rudder. And all they hear are platitudes.”

The Treasury has allowed many of the main proposals in this week’s spending review to leak out in the past few days, in particular the two cost-saving measures that Sunak plans to impose – both crowd pleasers for Tory backbenchers.

A pay freeze over the next year for all 4.5 million public sector workers, except doctors and nurses, and a cut in overseas aid will be announced, though these are expected to be the only cost-saving measures in a package otherwise focused on growth.

Suren Thiru, head of economics at the British Chambers of Commerce, says that is just as well, when “the whole project should be about injecting confidence and momentum into the economy”.

Rishi Sunak in a face mask sticking an 'Eat out to help out' sticker in a window



Sunak seemed much more sure-footed in spring and summer – here advertising his ‘eat out to help out’ scheme in August – than he has since. Photograph: Jeff J Mitchell/PA

There will be plenty of space given in the chancellor’s speech for the government’s levelling-up agenda, infrastructure spending and the creation of green jobs. But Torsten Bell, chief executive of the Resolution Foundation thinktank, reflects widespread frustration when he says there needs to be more meat on the bones.

“There will be huge amounts of money allocated to infrastructure, and especially research and development, which was championed by Dominic Cummings and signed off before he left.” said Bell. “But there will be a good deal of frustration if the detail is lacking.”

Caterina Brandmayr, head of climate policy at the thinktank Green Alliance, said the 10-point green industry package announced by the government last week lacked “the level of detail and scale of funding that would give a clue about how the government plans to achieve its aims”.

She hopes the chancellor will go some way to giving it some financial heft. “It is not only a matter of publishing strategies: it is also the scaling-up of funding that is needed,” she said.

The 10-year plan was billed as costing £12bn, with Downing Street saying £8bn of this was new – though Labour said it believed only £4bn was fresh funding.

A forecast for the public finances for the rest of the parliament and beyond by the Office for Budget Responsibility, the government’s independent forecaster, may explain why amplifying modest spending increases is the order of the day.

The OBR is expected to say that the annual deficit – the gap between government expenditure and income – is on course to rise from 2.5% of GDP last year to around 20% this year – about £400bn – taking the total debt ratio to around 106% of GDP.

uk debt

Carl Emmerson, deputy director of the Institute for Fiscal Studies, said the size and scale of Covid-related spending would make it difficult to discern the underlying health of the public finances. “If this was a war, there would be a reserve fund and the military would draw on it when needed,” he said. “A pandemic is like a war in the level of spending, but it happens across a broad spread of departments, and that makes it much more difficult to assess.”

Emmerson said the OBR figures would look alarming, but the emphasis had to be on expanding the economy as a way to increase government income and reduce the need for emergency economic support.

“In 2010, following the banking crash, George Osborne said the economy would be smaller in the years ahead and so public spending will be smaller. We are unlikely to see that next week,” he said.

For all the reservations about the chancellor’s U-turns – each time spending more than he had intended only weeks before – he has the praise of the International Monetary Fund to fall back on. In its twice-yearly health check, the Washington-based organisation said the UK’s response to the pandemic had been “one of the best examples of coordinated action globally”.

Sunak will hope that, after his recent mis-steps, he can recapture his glorious spring.


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BioNTech’s Covid vaccine is a triumph of innovation and immigration | Hans-Werner Sinn | Business

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The world took note when the German startup BioNTech announced its breakthrough in the development of a new type of vaccine to combat Covid-19. After testing tens of thousands of people, BioNTech’s vaccine has been shown to be 95% effective in providing protection for those who would otherwise have been infected. The company was the first to apply for emergency use authorisation for a coronavirus vaccine in the US and it has announced it will soon take similar steps in Europe.

Antiviral vaccines are usually made with devitalised viral materials fabricated outside the body but BioNTech has pursued a new method of injecting genetically modified RNA into the patient. This prompts the patient’s cells to produce a characteristic protein of the relevant Sars-CoV-2 virus themselves, enabling the body’s immune system to build up an effective response before it encounters the real virus.

The great advantage of this approach is that it allows for the production of more than 1bn vaccine doses within the space of only a few months. It is also highly safe because the modified RNA can survive only at a very low temperature and quickly degrades in the body once it has performed its job. Any subsequent damage to the body is therefore extremely unlikely.

In close cooperation with the US pharmaceutical giant Pfizer, BioNTech’s success augurs a rapid uptake of widespread vaccination in Europe and the US. Indeed, delivery contracts for millions of doses of the vaccine are already in place. And it is encouraging that the US drugmaker Moderna has also announced quantitatively similar results in its trials, using a closely related process involving a slightly more stable RNA variant.

More broadly, many other companies are advancing the frontier of next-generation RNA-based vaccines. Among these is CureVac, a company based in the German town of Tübingen, which has invented a new rapid-programming process for RNA that promises to be widely applicable.

Thanks to these new technologies, the world will likely be freed from the scourge of Covid-19 sometime in 2021 or 2022. Once again, we will be able to eat out and go to the theatre without worries; private weddings and parties will no longer be cause for concern. The airline and travel industries will quickly return to normal, and the global economy will be revitalised after a long period of lockdown-induced paralysis.

A major difference is that we will emerge with a completely new pharmaceutical industry, one that promises to provide extremely effective vaccines against numerous other infectious diseases. Moreover, RNA can, in principle, be programmed in such a way as to produce antibodies against specific types of cancer, promising forms of treatment that are far gentler than chemotherapy.

At BioNTech, the pioneers of the new RNA-based approach to drug development are Uğur Şahin and Özlem Türeci, a couple specialising in oncology and genetic research. Şahin, who holds a chair in experimental oncology at the University of Mainz, is one of the world’s top researchers in the study of personalised vaccines for cancer immunotherapy. Both are German citizens born to Turkish immigrants who came to the country decades ago.

Şahin and Türeci are prime examples of the successful integration of immigrants – including those from Turkey – into German society. They managed not only to gain a foothold in Germany but to thrive, thanks to hard work, an entrepreneurial spirit and strong cultural traditions.

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BioNTech’s story shows that successful immigration is about more than welfare magnetism. Managed properly, immigration is a key source of new blood and fresh ideas for an ageing society.

It is worth recalling that Germany’s pharmaceutical industry was one of the earliest manufacturers of the contraceptive pill, starting in the 1960s. No other country embraced this method of contraception more comprehensively. As a consequence, however, the German fertility rate had fallen sharply by the early 1970s – six years before Italy experienced a similar decline, 10 years before Spain did and 20 years before Poland did.

Germany has been paying the price for this early pharmaceutical success. Its largest population cohort comprises people in their mid-50s, who were born just before the pill-induced drop in birthrates. All of the subsequent generational cohorts have steadily shrunk. Under these demographic conditions, stagnation and decline would be inevitable without immigration. In fact, Germany now needs a continuous inflow of migrants just to fill the population gap that its earlier pharmaceutical successes has caused. Fittingly, Germany’s pharmaceutical industry is achieving international acclaim thanks to the innovative work of two children of immigrants who were lured to the country by the demographic vacuum to which the industry itself contributed. Şahin and Türeci are pioneers in an area of genetic research that now promises to give a new breath of life to the pharmaceutical industry, the European economy and the entire world.

Hans-Werner Sinn, is professor of economics at the University of Munich. He was president of the Ifo Institute for Economic Research and serves on the German economy ministry’s advisory council.

© Project Syndicate


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Shopping on Black Friday? Remember the stranded seafarers who make it possible | Black Friday

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This weekend is one of the planet’s busiest shopping sprees, with an estimated £66bn to be spent in the UK alone over Black Friday and Cyber Monday, much of it online. Yet as shoppers click and wait to collect, there is a crisis at sea among the people whose work brings us these goods.

It is no exaggeration to say that without shipping the global marketplace would collapse. It is responsible for the movement of 90% of all global trade. Even in normal circumstances, more than a million seafarers labour daily on the vessels that make up the world cargo fleet, their work barely noticed by consumers. As Covid-19 has ravaged the world, they have helped keep the global economy functioning, unseen.

As Guardian Seascape has repeatedly reported, however, nearly 400,000 of these seafarers are trapped by the crew change crisis. Most have not been designated key workers during the pandemic, and have remained effectively imprisoned on board their vessels – unable to change crews at ports, and therefore unable to return to their homes and loved ones.

The silence on the plight of these stranded seafarers is widespread: from the governments that have decided shipping crew are not essential workers, to the major retailers that profit from tremendous sales. This failure takes on renewed importance now, as new vaccines against Covid-19 are developed and the conversation turns to who should be inoculated first. The International Maritime Organisation, the UN body for shipping and seafarers, has failed to get countries to uphold standards of care and repatriation for seafarers. They are, in effect, lost at sea.

Many have been so for more than a year, with their physical and mental wellbeing deteriorating rapidly as a result. They work in some of the world’s toughest conditions to satisfy global retail demand, and their struggle has been recognised by Pope Francis and António Guterres, secretary general of the United Nations. As yet, however, we have heard little from those in the retail sector who actually have the power to make a difference.

The majority of shipping seafarers are from the Philippines, China and India, and it is perhaps the case that some in the west see their plight as a problem for the other side of the world. But shipping is a truly global enterprise, and the potential ramifications of continued indifference are just as universal. Not only does the humanitarian crisis at sea worsen every day, but the failing health of our seafarers affects productivity, which in turn hurts the seamless transportation of goods around the world.

As things stand, a few major retailers are poised to profit immensely from the work of seafearers in the rush for goods on Black Friday and Cyber Monday. The International Chamber of Shipping has written an open letter to Jeff Bezos, CEO of Amazon, asking him to use his influence to exert pressure on governments to recognise seafarers as key workers, so that they can change crews, go home and be reunited with their families.

The plight of seafarers is global, and requires a global response. Governments must give seafarers the same rights as other essential workers, and corporate responsibility must extend to seafarers as it does to other employees. Retail profiteering at the hands of trapped men and women must end. Until then, before you click “add to cart,” spare a thought for the seafarers whose work will help deliver the contents of that cart to the comfort of your home, even while they can’t get home themselves.

• Nusrat Ghani is MP for Wealden and a former maritime minister. Guy Platten is secretary general of the International Chamber of Shipping


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Most expensive family feud in history to take the stage at London court | The super-rich

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The most expensive – and acrimonious – family breakdown in history will be laid bare in a London court next week in a divorce battle over a £453m fortune that includes several luxury mansions, a superyacht called Luna, a helicopter, a private jet and an art collection including pieces by Mark Rothko, Andy Warhol and Damien Hirst.

Tatiana Akhmedova will accuse her ex-husband, Farkhad Akhmedov, an oligarch and ally of the Russian president, Vladimir Putin, and their son Temur Akhmedov of hiding hundreds of millions in assets in order to avoid paying the blockbuster settlement awarded to her by the high court in 2016.

Akhmedova alleges that her Azerbaijani-born Russian husband transferred cash and assets to their son in order to avoid paying her the money. They deny the claims and say she was aware of the father-to-son gifts, which included a £30m apartment in One Hyde Park, the exclusive London development, at the time. On Monday she will take her son to the high court accusing him of acting “as his father’s lieutenant” in a scheme to hide the fortune.

In her quest to uncover the award Akhmedova has in the past two weeks won court orders to raid her son’s luxury apartment in the opulent Knightsbridge development to search for evidence, and to force Google to hand over the contents of his emails.

Speaking publicly for the first time her son, Temur, 27, said that no matter what happens in court he would “never be reconciled with her” because “her outrageous, revengeful behaviour” has destroyed their once close relationship.

The search of flat and associated wine cellar led to the seizure of 58 devices, 47 of which were said to belong to Temur. He said the devices included four Xboxes and a PlayStation console.

“Our mother raised us very well, she was a good mother,” he said. “But this claim is because she doesn’t like me because I didn’t stick on her side. I couldn’t imagine in a million years going against my own blood. She is just out for revenge. How can you give birth to your kids and then fight against them in court?”

The exclusive One Hyde Park development in London
One Hyde Park in London. Akhmedova alleges her husband transferred cash and assets, including a £30m flat in the development, to their son to avoid paying her money. Photograph: View Pictures/UIG via Getty Images

Ahead of the trial Temur was served with a worldwide freezing order preventing him from transferring funds or selling any assets. He said the order limited his spending to £3,000 a week. “Now maybe for the average person that seems like a fucking crazy amount but in reality it’s different,” he said in a telephone interview from Dubai.

Temur said of the freezing order: “I sent her [his mother] a text, I said ‘why the fuck are you doing this?’”

He claimed his mother was not entitled to the £453m from his father’s fortune she was awarded by a London court in 2016, because his parents divorced 20 years earlier after his mother had an affair with a younger man.

He said his father offered his mother £100m to formalise the split, but his mother filed for divorce in London and a judge awarded her a 41.5% share of the £1bn family fortune.

“If my mother was on the street I would totally understand,” Temur said. “I would never let that happen, but she lives a very good life. She’s always on holiday always travelling. I see her updates on WhatsApp, she was in Ibiza a few weeks ago and Italy.”

The allegation that they previously divorced was dismissed by the family court in 2016. It was also later reported that this finding was challenged by the father in the Russian courts, which reinforced the English court’s ruling.

Akhmedova has tried since 2016 to enforce the judgment. The settlement remains the highest award in UK history and remains unsatisfied despite consistent enforcement attempts made in various jurisdictions.

A source close to Akhemdova’s legal team said Temur had acted “as his father’s lieutenant” in executing schemes to avoid paying her the divorce settlement. He denies this.

“This trial has come about because, in the four years since Tatiana Akhmedova was awarded the £453m divorce settlement, no money has voluntarily been paid to her,” the source said. “This has led to extensive enforcement efforts against Farkhad Akhmedov’s assets and an investigation of the various methods employed by Farkhad to place assets beyond Tatiana’s reach.

“Tatiana brought claims against her son Temur Akhmedov, alleging that he had received substantial financial sums and assets from Farkhad in order to put them beyond his mother’s reach and in order to frustrate the enforcement of the divorce award. Tatiana contends that Temur played a key role – essentially as his father’s lieutenant – in Farkhad’s strategy of evasion by devising and executing the schemes.”

Temur’s mother’s legal team, which is being funded by litigation financier Burford Capital, had at one stage attempted to seize Akhmedov’s £300m superyacht. The yacht called Luna, which had been built for Chelsea football club owner Roman Abramovich, has 10 VIP cabins and a 20-metre swimming pool.

Farkhad Akhmedov has previously said he will make all efforts to overturn what he has always said was “a misguided and wrong judgment by the English high court”.

• This article was amended on 28 November 2020 to clarify that the text Temur Akhmedov sent his mother was in relation to the freezing order, not the search of his apartment as an earlier version said.


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