Encipia: The Mechanics of Business

February 4, 2021

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The Labour Theory of Value

May 4, 2017

Economies on the move – but to where?

The UK economy appears to be venturing where no nation has gone before – at least in modern times. John Egan puts forward new analysis…

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US emissions ‘will be halved’ after leaders unite
President Biden committed the US to halving its emissions within a decade as he led world leaders making pledges to tackle climate change at a summit yesterday. President Xi of China called for harmony and President Putin of Russia requested “genuine collaboration” at a virtual gathering which was seen as a stepping stone to the Cop26 climate conference in Glasgow in November. Although China failed to improve upon its goal of net-zero emissions by 2060 and India and Russia offered little new, there were substantial changes to reduction targets from others. Biden set the pace by saying the US would cut harmful emissions by between 50 and 52 per cent in nine years compared with 2005 levels. Britain will enshrine in law a target of 78 per cent cuts from 1990 levels by 2035, Brazil and the EU are seeking carbon neutrality by 2050, Japan nearly doubled its 2030 target to 46 per cent compared with 2013 and Canada set a target of up to 45 per cent from 2005. The Times, April 23

One dose of Pfizer or AZ jab reduces Covid infection rate by 65%
One shot of the Oxford/AstraZeneca or Pfizer/BioNTech vaccine reduces coronavirus infections by nearly two-thirds and protects older and more vulnerable people as much as younger, healthy individuals, a study has found. The results from Oxford University and the Office for National Statistics are a welcome boost to the vaccination programme and the first to show the impact on new infections and immune responses in a large group of adults in the general population. By driving down rates of infection the vaccines will not only prevent hospitalisations and deaths but help break chains of transmission and so reduce the risk of a damaging resurgence of disease as the UK reopens. The researchers analysed Covid test results from more than 350,000 people in the UK between December and April. They found that 21 days after a first jab – the time it takes the immune system to mount a decent response – new Covid infections dropped by 65 per cent. The Guardian, April 23

Covid pushes UK to borrow most since WWII
The coronavirus pandemic forced Britain’s government to borrow more than at any time since the second world war, the Office for National Statistics said as it published the first provisional estimates of the public finances for the 2020-21 financial year. The UK borrowed £303.1bn in the year ending in March, an increase of £246.1bn on the previous year when borrowing was only £57.1bn. Although historically large, the level of government borrowing was not as bad as had been feared. This prompted the Treasury to tell financial markets on Friday morning that it would issue £43.3bn less debt in 2021-22 than it had planned as recently as the Budget on March 3. The lower than expected borrowing numbers did not diminish the scale of the deficit in 2020-21 as the economy reeled from the effects of coronavirus. Tax revenues fell while public spending on health services and furlough schemes surged. Financial Times, April 23

VIP lane for Covid suppliers left UK civil servants ‘drowning’ in non-credible bids
Civil servants found themselves “drowning” in bids for Covid contracts that failed to meet due diligence standards after the government created a “VIP lane” for politically connected suppliers, a court has been told. Evidence disclosed as a result of a legal action brought against the government by the Good Law Project suggests the controversial scheme resulted in a deluge of non-credible offers to supply personal protective equipment, some of them recommended by MPs and ministers. The government has repeatedly refused to reveal which companies were awarded public money after having their bids assessed through the VIP lane, citing “commercial confidentiality”. It denies that ministers had any role in dictating which companies received contracts, or that the scheme was used to direct public money to applicants favoured by the government. The Good Law Project case, however, illustrates how in at least two instances the political connections of companies appear to have factored into their bids for government Covid contracts being referred into the VIP lane. The Guardian, April 22

Britons snap up clothes and gardening products
Retail sales in Britain grew more than expected last month as shoppers bought food for Easter and clothes and gardening products ahead of the relaxation of some Covid-19 restrictions. Retail sales rose 5.4 per cent in March compared with the previous month, data from the Office for National Statistics showed on Friday. That was a much stronger reading than the 1.5 per cent forecast by economists polled by Reuters and followed an expansion in February, even though non-essential stores have been shut since early January. Separate data by the research company GfK showed on Friday that consumer confidence rose further, to the highest level since before the first lockdown in April, supporting the view that more optimistic shoppers will continue to spend as businesses reopen. Financial Times, April 23

Convicted Post Office workers are cleared
Judges have quashed the convictions of 39 former postmasters after the UK’s most widespread miscarriage of justice. They were convicted of stealing money, with some imprisoned, after the Post Office installed the Horizon computer system in branches. The system was flawed and postmasters and postmistresses have spent years trying to clear their names. Judges said the Post Office sought to reverse the burden of proof when prosecuting the postmasters. Following the convictions, including theft, fraud and false accounting, some former postmasters went to prison, were shunned by their communities and struggled to secure work Some lost their homes, and even failed to get insurance owing to their convictions. Some have since died. They always said the fault was in the computer system, which had been used to manage post office finances since 1999. At the Royal Courts of Justice in London, Lord Justice Holroyde said the Post Office “knew there were serious issues about the reliability of Horizon” and had a “clear duty to investigate” the system’s defects … The Court of Appeal also allowed the appeals on the basis that their prosecutions were an affront to justice – that allows the possibility of further claims for compensation against the Post Office. BBC news, April 23

New measures stop PL clubs joining breakaways
The Premier League is set to change its rules to ensure that no member club will ever be able to join a breakaway European league again. A governance review already being carried out by the Premier League’s chief executive, Richard Masters, in conjunction with the FA will now focus specifically on ending any such future threat of an English team signing up to a rebel competition. Under the Premier League’s rule L9, there is a list of other competitions that member clubs are permitted to play in, but the new rule will end any possible ambiguities around new competitions outside the existing football structures. Some top-flight clubs are still pushing for the “big six” – Liverpool, Arsenal, Tottenham Hotspur, Chelsea and the two Manchester clubs – to face sanctions for joining the Super League on Sunday, only to pull out 48 hours later after a storm of criticism from their own fans, as well as threatened action from the government and the football authorities. The Times, April 22

Cummings accused of leaking PM’s texts
Boris Johnson believes that Dominic Cummings is behind damaging leaks including the disclosure of the prime minister’s text messages. A No 10 source claimed that Johnson’s former senior adviser was “engaged in systematic leaking” and “bitter about what’s happened since he left”. The prime minister was “saddened about what Dom is doing”, the source said as they accused him of “undermining the government and the party”. Earlier this week leaked messages revealed that Johnson had texted Sir James Dyson, a Tory donor, offering to “fix” a problem over the tax status of his employees. The entrepreneur had gone directly to the prime minister after responding to an appeal to help build ventilators for the NHS at the start of the pandemic. The Times, April 23

Biden to ‘propose hiking tax on rich’
US President Joe Biden is reportedly set to propose a tax hike on the wealthiest Americans. The proposal would raise the top marginal rate and increase taxes on investment gains for the rich. The tax rise would help pay for childcare and education, but would not be used for healthcare, according to reports. The news triggered a selloff on Wall Street, with major indexes slipping during Thursday’s trading session. The White House said the American Family Plan, which Mr Biden is expected to lay out in full next week, will not affect any family earning less than $400,000 a year … The proposal would increase the top marginal income tax rate to 39.6 per cent from 37 per cent, according to the New York Times and Bloomberg. The move would effectively reverse Donald Trump’s 2017 income tax cut for highest income earners. The plan would also nearly double taxes on capital gains to 39.6 per cent for people earning more than $1m. BBC news, April 23

China’s central bank fights Jack Ma’s Ant Group over control of data
China’s central bank is attempting to take control of Ant Group’s vast trove of consumer lending data, marking the latest front in Beijing’s crackdown on Jack Ma’s financial technology group. Beijing wants to curtail the power of Ant Group and Ma, China’s best-known entrepreneur, who has largely disappeared from public view since publicly criticising state-owned banks and regulators in October. The company was forced to pull its $37bn initial public offering, which was set to be the world’s largest, the following month. The People’s Bank of China wants Ant to turn over its data, one of the most valuable assets in Ma’s internet empire, to a state-controlled credit scoring company that would be run by former executives of the central bank, according to people close to the negotiations. The entity would also serve other financial institutions, such as state-owned banks, that compete with the fintech group’s lending operations. Financial Times, April 23

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