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Trade war looms as UK set to spurn EU offer on Northern Ireland

Trade

Trade war looms as UK set to spurn EU offer on Northern Ireland

Fears that the UK is heading for a trade war with the EU have been fuelled by strong indications from the government that it thinks proposals to be unveiled in Brussels on Wednesday over Brexit arrangements do not go far enough.

The Brexit minister, David Frost, will use a speech in Portugal on Tuesday to say that the EU scrapping its prohibition on British sausages to resolve the dispute over the Northern Ireland protocol does not meet the UK and unionists’ demands.

Lord Frost will call for “significant” changes to the post-Brexit agreement he negotiated, including over the role of the European court of justice, something the EU is highly unlikely to concede to.

“Without new arrangements in this area, the protocol will never have the support it needs to survive,” he will warn on the eve of a significant move by the EU to resolve the row.

Ireland’s foreign minister, Simon Coveney, reacted with incredulity at the UK’s “red line” and its timing just days before what he said was a “serious” offer from the EU.

He tweeted: “EU working seriously to resolve practical issues with implementation of Protocol – so UKG creates a new “red line” barrier to progress, that they know EU can’t move on … are we surprised? Real Q: does UKG actually want an agreed way forward or a further breakdown in relations?”

Frost immediately responded to Coveney, saying his demands over the ECJ were nothing new.

“I prefer not to do negotiations by Twitter, but since @simoncoveney has begun the process … the issue of governance & the CJEU [court of justice of the European Union] is not new. We set out our concerns three months ago in our 21 July Command Paper. The problem is that too few people seem to have listened,” he said.

1. I prefer not to do negotiations by twitter, but since @simoncoveney has begun the process…

…the issue of governance & the CJEU is not new. We set out our concerns three months ago in our 21 July Command Paper.

The problem is that too few people seem to have listened.

— David Frost (@DavidGHFrost) October 9, 2021
The EU’s Brexit commissioner, Maroš Šefčovič, will table four papers on Wednesday on the subject of how the Northern Ireland protocol can be improved – which he has described as “very far-reaching”.

Included will be a proposed “national identity” exemption for British sausages from the EU’s prohibition on prepared meat from a third country, sources said.

However, Mujtaba Rahman, the managing director of the Eurasia Group consultancy, warned in a note to clients on Saturday that the absence of concessions on the ECJ will give Frost the justification for triggering article 16, the mechanism for putting the Northern Ireland protocol into formal dispute process or putting it into abeyance by disapplying the arrangements altogether.

“There is a huge amount of cynicism in the EU about what the government’s actual objectives are. Is it to fix substantive issues in Northern Ireland or is it to keep an ideological fight with the EU rolling because it serves certain sections of the Tory party?” said Rahman.

“The French president and the German chancellor and the European Commission president cannot wake up every single day to a new argument with Boris Johnson. At some point they need to send a stronger, simpler message.

“Use of a termination clause within the trade and cooperation agreement itself can be triggered unilaterally and would fully suspend the zero tariff/quota trade deal between the two sides.”

This cross-retaliation mechanism allowing trade penalties for breaches of the withdrawal agreement was agreed by both sides, but others think the EU will not be so keen to go nuclear.

Catherine Barnard, professor of EU law at the University of Cambridge, believes short sharp shocks in the form of tariffs on such British products as Scottish whisky or salmon are more likely.

She also said that the ECJ is not a significant issue in relation to the trade of goods. Its annual report cites just 24 cases relating to customs union laws currently pending, among more than 1,045 in total.

Frost also told delegates at the Conservative party conference last week that the rules required the EU to be “proportionate” but said he still hoped to come out of negotiations with a fresh deal.

Retaliatory measures are unlikely until next year, with the EU expected to respond with infringement and legal proceedings as its first response to any suspension of the Northern Ireland protocol by the UK.

The protocol, designed to avoid a hard border between the UK and the single market operating in the Republic of Ireland, placed a border in the Irish Sea, enraging unionists who see checks on goods coming into Northern Ireland from Britain as an attack on the integrity of the UK and their British identity.

The EU is expected to propose eliminating checks on goods destined to remain in Northern Ireland, with checks only on those products that are intended for sale in the republic.

Both sides have said they expect to go into a period of intense negotiation, which Frost put at three weeks, after the EU’s response to the UK’s demands are published on Wednesday.

However, one school of thought is that Frost and the home secretary, Priti Patel, are being used to keep the Brexit pot boiling to show how the UK is sticking up against “EU bullies”.

Others think the fight over Northern Ireland is more fundamental. One former Downing Street official said he had been told that Boris Johnson “was going round telling people he had been misled” over the protocol and was determined it would have to be rewritten.

Frost will say on Tuesday that “the UK-EU relationship is under strain” but if the two sides can put the protocol “on a durable footing, we have the opportunity to move past the difficulties of the past year”.

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British pound plunges to new low as tax cuts spark concern

British pound plunges to new low as tax cuts spark concern

The British pound fell to all-time low against the U.S. dollar early Monday after Treasury chief Kwasi Kwarteng pledged a sweeping package of tax cuts, fueling concerns about the government’s economic policy as the United Kingdom creeps toward recession.

The pound fell as low as $1.0373, before rallying to $1.0672 in early London trading. It was its lowest level since the decimalization of the currency in 1971.

The British currency has lost more than 5% of its value against the dollar since Friday, when Kwarteng announced the biggest tax cuts in 50 years. It comes as the government plans to spend billions of pounds to help consumers and businesses struggling with high energy bills that are driving a cost-of-living crisis. The combination sparked investor concern about spiraling government debt.

Kwarteng and Prime Minister Liz Truss, who took office three weeks ago, are betting that lower taxes and reduced bureaucracy will spur economic growth and generate enough additional tax revenue to cover government spending. Economists suggest it is unlikely the gamble will pay off.

Opposition Labour Party economy spokeswoman Rachel Reeves said Kwarteng had “fanned the flames” of instability by talking up more tax cuts and said the government’s policies were “reckless.”

When grilled about his economic policy Sunday, Kwarteng said he believed the government was acting responsibly.

“There’s more to come,” he said in an interview with the BBC. “We’ve only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it is the British people that are going to drive this economy.”

As it is cutting taxes, the government plans to cap electricity and natural gas prices for homes and businesses to help cushion price rises that have been triggered by Russia’s war in Ukraine and have sent inflation to near a 40-year high of 9.9%.

This program will cost 60 billion pounds, and the government will borrow to finance it, Kwarteng said Friday.

He said Sunday that it was the right policy because the government needed to help consumers squeezed by the unprecedented pressures caused by the war in Ukraine and the COVID-19 pandemic.

Britain can afford the cost because its debt as a percentage of gross domestic product is the second lowest among the Group of Seven large industrial economies, Kwarteng said. In the coming months, the government will announce plans for reducing the nation’s debt, he said.

When grilled about his economic policy Sunday, Kwarteng said he believed the government was acting responsibly.

“There’s more to come,” he said in an interview with the BBC. “We’ve only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it is the British people that are going to drive this economy.”

As it is cutting taxes, the government plans to cap electricity and natural gas prices for homes and businesses to help cushion price rises that have been triggered by Russia’s war in Ukraine and have sent inflation to near a 40-year high of 9.9%.

This program will cost 60 billion pounds, and the government will borrow to finance it, Kwarteng said Friday.

He said Sunday that it was the right policy because the government needed to help consumers squeezed by the unprecedented pressures caused by the war in Ukraine and the COVID-19 pandemic.

Britain can afford the cost because its debt as a percentage of gross domestic product is the second lowest among the Group of Seven large industrial economies, Kwarteng said. In the coming months, the government will announce plans for reducing the nation’s debt, he said.

“Obviously, I will be setting out plans for the medium-term fiscal plan, as we’re calling it, that will show that we’re committed to net debt-to-GDP to be falling over time,” Kwarteng said.

The pound’s decline against the dollar also has been fueled by the Bank of England not keeping pace with the U.S. Federal Reserve’s efforts to rein in inflation. Britain’s central bank on Thursday raised interest rates by half a percentage point, compared with large three-quarter-point increase by the Fed last week. But U.K. inflation is the highest among major economies, and the bank has predicted a recession later in the year.

While the pound’s slide has accelerated in recent days, the currency has fallen steadily against the dollar for more than a year as investors sought the security of U.S. assets amid the economic shocks from the pandemic and the war in Ukraine.

The British currency has dropped more than 24% against the dollar since its recent peak of $1.4181 on May 27, 2021.

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37 firms get licences to produce 762.3MW

37 firms get licences to produce 762.3MW

Fresh licenses and permits have been issued to 37 companies to produce a total of 762.3 megawatts of electricity in order to boost power supply across the country, data obtained from the Nigerian Electricity Regulatory Commission showed.

An analysis of the commission’s latest Fourth Quarter 2021 Report on Sunday also indicated that the metering of power users dropped by 71.86 per cent when compared to the number of those who were metered by power distribution companies in the preceding quarter.

In the new report, the NERC said, “The commission approved the issuance of four new generation licenses with a total nameplate capacity of 508.5MW and the renewal of two existing licences in 2021/Q4.

“The commission also granted an aggregate capacity of 253.75MW captive power generation permit to eight companies and approved 25 mini-grid permits.”

It stated that 46 metering service providers consisting of 17 installers, 15 manufactures, two vendors and 12 importers were also approved by the commission in 2021/Q4

“The commission granted a total of 85 licenses and permits in 2021/Q4,” the report stated.

On metering, it stated that the huge metering gap for end-use customers was still a key challenge in the industry.

“A total of 81,084 meters were installed in 2021/Q4, as compared to the 288,154 meters installed in 2021/Q3,” the NERC stated.

Providing an explanation for this, it said, “The reduction in the number of meter installations in 2021/Q4 was largely driven by the winding down of the NMMP (National Mass Metering Programme) phase zero.

“The commission’s records indicate that, of the 10,514,582 registered energy customers as at December 2021, only 4,773,217 (45.40 per cent) have been metered compared to 42.93 per cent metering as at September 2021.”

It, however, stated that as a safeguard against overbilling of unmetered customers via estimation, the commission had set maximum limits to the amount of energy (energy caps in kWh) that might be billed to unmetered customers.

“The cap for each customer is set based on the customer category, consumption of metered customers on the same feeder and the customer’s tariff band.” the NERC stated.

It added, “The caps are computed based on three-month data of actual consumption records of metered customers on the same feeder.”

On customer complaints, the regulator stated that in 2021/Q4, cumulatively, the Discos received 222,639 complaints from consumers, as this was 24,479 (-9.91 per cent) less complaints than those received in 2021/Q3.

“In total, the Discos resolved 212,382 complaints corresponding to a 95.39 per cent resolution rate. Metering, billing, and service interruption were the prevalent sources of customer complaints, accounting for 58.83 per cent of the total complaints during the quarter,” it stated.

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Ethiopian Airlines Wins Bid For Nigeria Air

The Federal Government has selected the Ethiopian Airlines (ET) Consortium as preferred bidder for Nigeria Air.

Minister of Aviation, Sen. Hadi Sirika disclosed this in a media briefing on Friday in Abuja.

He said ET scored 89 percent out of 100 as regards the technical bid and 15 out 20 as regards financial bid.

Mr Sirika said the Request for Proposal (RFP) under the Public-Private Partnership (PPP) Act, governed by Infrastructure Concession Regulatory Commission(ICRC) regarding the Nigeria Air was now completed.

He said, “After a careful, detailed and ICRC governed selection process, Ethiopian Airlines (ET) Consortium has been selected as preferred bidder, offering an owner consortium of 3 Nigerian investors.

“The Nigerian investors are MRS, SAHCO and the Nigerian Sovereign Fund (46%), FGN owning 5% and ET 49%. The consortium has been subject to a due diligence process.

“The contract will be negotiated between consortium and FGN leading to a Full Business Case (FBC) which will be expected to be approved by the Federal Executive Council (FEC). We expect this process to take 6-8 weeks.”

The minister said the national carrier would be launched with three Boeing 737-800 in a configuration very suitable for the Nigerian market.

Mr Sirika said Nigeria Air will be launched with a shuttle service between Abuja and Lagos to establish a new comfortable, reliable and affordable travel between the two major Nigerian Airports.

“The first aircraft is ready to arrive in Abuja for the further work and NCAA inspection, demo flights and audit as part of the AOC requirements.

“In time, two others will arrive to complete the required three aircraft for a new AOC holder. The interim executive team has prepared, with the support of FAAN.

“The team has arranged for Terminal C at the Abuja Airport and finalised a contract with MMA 2 terminal in Lagos, for the operation of an initial shuttle between Lagos and Abuja,” he said.

The Operations Control Centre (OCC) at the Abuja Airport would act as Headquarters of the airline.

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