Month: January 2023

Christian Lindner said Germany had completely diversified its energy infrastructure since Russia’s invasion of Ukraine last year.

Following the invasion, Russia turned off the gas taps to Europe, leading to fears of blackouts this winter.

But Germany had found new sources of energy, Mr Lindner said.

“Yes, of course Germany is still dependent on energy imports, but today, not from Russian imports but from global markets,” he said.

Germany previously imported around half of its gas from Russia and more than a third of its oil.

But Russia cut off the country’s gas supply in August, while Germany halted Russian oil imports at the start of the year.

In its race to find alternate sources of energy, the country has reopened coal-fired power plants, delayed plans to shut down its three remaining nuclear power plants, and pushed to increase capacity to store natural gas imported from other countries such as Norway and the US.

At the World Economic Forum (WEF) in Davos, Switzerland, Mr Lindner pointed to the speed with which a new liquefied natural gas terminal had been built in Germany – in a record of around eight months, he said. More infrastructure investments were planned, he added.

“This is only [one] example of the enormous change in German policies,” he said.

“We have understood that we have to foster our competitiveness after the era of Chancellor [Angela] Merkel. That era was focused on, well, strengths of the past, and now we are developing strengths of the future,” he said.

Mr Lindner struck an optimistic note, suggesting there was “some evidence” that inflation in Germany had reached its peak last year.

“Probably there’s a faster recovery of the global economy and European economies than expected,” he said.

However, potential for a damaging trade row between the EU and the US over green subsidies remains.

The US last year approved a massive $370bn (£299bn) in investments for climate-friendly technologies, including tax credits for electric cars that are made in America.

However, the law includes some “made in America” rules, which have raised concerns in Europe that businesses outside the US will be put at a disadvantage.

In a visit to Washington last month, French president Emmanuel Macron criticised the US rules as “super aggressive”.

Mr Lindner said he did not want to see the European Union start a trade war with the US over those rules.

“We have to avoid any kind of competition – who is able to pay more subsidies,” he said. “It mustn’t happen.”

Mr Lindner’s comments signal the challenges that lie ahead as Europe tries to develop a response to the US climate law, which is officially called the Inflation Reduction Act.

France has proposed responding with rival “buy European” incentives, and European Union officials this week also promised “decisive” steps.

Mr Lindner said maintaining a level playing field was important, but he wanted to see the two sides negotiate exemptions for companies or develop a new trade deal, rather than try to out-subsidise each other.

“There is a threat for the level playing field and I take this seriously but… we are spending and investing much more than the US-side so we don’t have to be afraid,” he said.

“Some in the European context, they see the Inflation Reduction Act as the occasion to introduce policies they’ve proposed in the past, and I think it is an occasion to strengthen our competitiveness at the European level, make further progress on capital markets union, to negotiate with the US side a free trade agreement – but not pay more subsidies,” he said.

Unlike the big French car companies, many German firms already have a big presence in the US, including manufacturing plants.

The “made in America” rules have prompted a pushback even from some American companies, many of which rely on parts manufactured in other countries.

A new bill due to go through parliament will raise the official age at which people can stop work from 62 to 64.

Intercity and commuter train services are expected to be badly disrupted.

Many schools and other public services will be shut. At Orly airport in Paris, one in five flights has been cancelled.

On the Paris metro only the two driverless lines will work normally.

Large demonstrations drawing tens of thousands are expected in Paris and other cities, where police will be out in force in case of violence from ultra-left “black bloc” infiltrators.

Under the proposals outlined earlier this month by Prime Minister Élisabeth Borne, from 2027 people will have to work 43 years to qualify for a full pension, as opposed to 42 years now.

Hailed by the government as a vital measure to safeguard France’s share-out pension system, the reform is proving deeply unpopular among the public – with 68% saying they are opposed, according to an IFOP poll this week.

All the country’s unions – including so-called “reformist” unions that the government had hoped to win to its side – have condemned the measure, as have the left-wing and far-right oppositions in the National Assembly.

“On Thursday the walls of the Élysée palace must tremble,” Communist Party leader Fabien Roussel said on Tuesday.

Because his Renaissance party does not have a majority in the Assembly, French President Emmanuel Macron will be forced to rely on support from the 60 or so MPs of the conservative Republicans party. Though in principle in favour of pension reform, even some of them have warned they could vote against.

With the parliamentary process expected to take several weeks, Mr Macron faces a rolling campaign of opposition, with further days of action likely in the days ahead. The worst outcome for the government would be rolling strikes in transport, hospitals and fuel depots – effectively bringing the country to a standstill.

Political analysts agreed the mood of the country was hard to gauge, so it was impossible to predict whether the scale of the movement would be enough to force the president into a retreat. If that happened, it could mark the end of any serious reforms in this, his second term.

On the one hand, inflation, the energy crisis and constant reports of run-down public services have left many people feeling anxious and irascible. President Macron’s poor image outside the prosperous cities contributed to the “yellow-vest” insurrection four years ago, and could well do so again.

But on the other hand, pollsters have also identified a sense of resignation among many people, who no longer identify with “old-school” social movements such as the unions specialise in. Many will also be too concerned about the loss of a day’s income to go on strike.

The prime minister invoked the principle of “inter-generational solidarity” to justify the decision to make people work longer. Under the French system, very few people have personal pension plans linked to capital investments.

Instead the pensions of those who are retired are paid from the same common fund into which those in work are contributing every month. Workers know they will benefit from the same treatment when they retire.

However, the government says the system is heading for disaster because the ratio between those working and those in retirement is diminishing rapidly. From four workers per retiree 50 years ago, the ratio has fallen to around 1.7 per retiree today, and will sink further in the years ahead.

Nearly all other European countries have taken steps to raise the official retirement age, with Italy and Germany for example on 67 and Spain on 65. In the UK it is currently 66.

President Macron made an earlier, and more ambitious, attempt to reform the system at the end of 2019, but pulled the plug when Covid hit. This second plan was part of his re-election manifesto last year – a key argument deployed by the government in the battle for public opinion.

To palliate the effects of the reform, Élisabeth Borne has promised easier ways to retire early for people in dangerous or physically demanding jobs; steps to encourage older people back into the workforce; and a higher guaranteed minimum pension.

The opposition argues the system is not technically in deficit at the moment, so there is no urgency to act. It says there are cost-saving alternatives to making people work longer, such as cutting pensions for the better-off.

It also says the brunt of the reform will be borne by the poorest. These are people who tend to start work earlier in life, so have normally earned the right to a full pension by the age of 62. Now they will have to work two extra years for no added benefit.

This is the seventh French pension reform since President François Mitterrand cut the retirement age to 60 in 1982.

Every subsequent attempt to reverse that change has led to mass opposition on the street – though in most cases the reform did in the end go through. For example, in 2010, Nicolas Sarkozy raised the retirement age to 62, despite weeks of protests

The strikes have cost the UK more than £1bn, he conceded to a committee of MPs.

However, Mr Merriman said no deal over pay was viable without unions agreeing to “modernise” working practices – a major sticking point in negotiations.

“It’s the reforms that will actually pay for these pay deals,” he said.

He also said the future of train operator Transpennine was under review.

When quizzed by the Transport Select Committee, Mr Merriman said the rail strikes cost rail organisations £25m per day on week days, and £15m per day on weekends.

He cited a report that found the strikes had cost the wider UK economy £700m from June to Christmas.

This has added up to a more than £1bn hit to the UK, he conceded to Labour MP Ben Bradshaw.

“If you look at it [through] that particular lens, then absolutely, it’s actually ended up costing more than would have been the case if it was just settled,” Mr Merriman said.

However, Mr Merriman added that if the government had settled with rail workers last year, it would have set a precedent for other public sector pay disputes.

“We have to look at what teachers are being given, and what nurses are being given as well,” he said.

The UK railway system, which is heavily subsidised by the government, is a patchwork of public and private sector organisations.

Although the train operating companies are mainly private sector, it was the taxpayer who was largely funding these pay settlements, Mr Merriman said.

The UK has been hit by waves of strikes as discontented workers in a number of sectors take action over pay and conditions.

Teachers and nurses are among the public sector workers who have taken strike action, with more strikes to come.

Mr Merriman told Mps that railway use had not bounced back after the pandemic, and inflation was running higher than a few years ago, making a pay deal that is acceptable to the unions “harder to deliver”.

Rail unions say any pay offer should reflect the rising cost of living, which is currently above 10%.

The RMT union, which represents rail workers, said Mr Merriman’s statements amounted to an admission that “prolonging the rail dispute was part of a deliberate strategy that was dictated by the government’s concern to keep down the pay of rail workers, nurses, ambulance workers and teachers”.

“The wider economy and the business interests who relied on pre-Christmas trade were just collateral damage in that policy,” said RMT general secretary Mick Lynch.

Mr Lynch also said the government had intervened just before Christmas to “torpedo” the talks between the unions and train firms – a charge which Mr Merriman denied to the committee.

Mr Merriman also said train operator Transpennine Express’ contract is under review.

Transpennine, which operates across the North of England and into Scotland, has been cancelling trains daily for months.

The company blames high sickness rates and a backlog of driver training due to the pandemic for cancellations.

Mr Merriman said that when the Transpennine Express contract comes to end in May, he is “already looking at what needs to be done… with regards to that contract”.

He said he had weekly data on Transpennine and another troubled operator, Avanti West Coast, and was monitoring what they were doing to turn things around.

The government recently gave Avanti six months to the end of March, to urgently improve.

A spokesperson for TransPennine Express said on Thursday: “We are committed to the communities we serve and want to assure our customers that we are doing all we can to deliver a train service they can rely on.”

Transpennine “continues to work flat-out to deliver higher levels of service delivery and to tackle the issues that are being experienced by customers,” the spokesperson added.

Prime Minister Rishi Sunak said the money would create jobs and “spread opportunity”.

The new Eden Project site in Morecambe, train services in Cornwall and a number of town centres are among the projects set to get funding.

But Labour said it was “a partial refund” on what the Tories “have stripped out of our communities”.

It also said London and the South East were getting the most funding – though these are the two regions with the largest populations.

The idea of “levelling up” – or reducing regional inequality – was a key part of Boris Johnson’s 2019 election campaign. Its aim was to close the gap between rich and poor parts of the country by improving services such as education, broadband and transport.

A total of 111 areas across the UK have been awarded money from the second round of the government’s Levelling Up Fund.

The Eden Project in Morecambe, Lancashire, will get £50m to help regenerate a derelict site on the seafront into an eco-tourism attraction.

There will also be a £50m grant to build a new direct train service linking Cornwall’s largest urban areas.

Mr Sunak’s own constituency of Richmond, in North Yorkshire, will get £19m to develop the Catterick Garrison town centre.

Other projects set to get funding include:

Rishi Sunak will attempt to get some national bang for his regional buck.

In other words, when a prime minister fronts a series of local announcements about spending, they generate attention locally.

But unless an overarching message is attached, the big picture message, or vision, from the centre, might get lost.

Mr Sunak is attempting to own the idea of “levelling up” – a Boris Johnson-era catchphrase focused on geographical inequality.

And there is more than a hint of the earliest skirmishes of a general election campaign in his day of dashing around various parts of the north-west and north-east of England.

There are plenty of keenly fought electoral battlegrounds nearby – and those battles are under way.

The political challenge for the government is the desire to “‘level up” as they put it, is a project whose timeframe is longer than an electoral cycle.

How quickly can you prove you have made a difference?

Intent counts for something. Delivery for much more.

Conservative party campaign headquarters have denied reports they have told MPs in marginal seats to stop using the phrase “levelling up” due to concerns the public do not know what it means.

A Conservative source told the BBC that MPs had “been told the precise opposite” and had instead been told how best to use the phrase based on the party’s opinion research.

The BBC has been told that, for example, MPs have been told not just to talk to constituents about how much money has been spent, but instead to talk about specific things that have changed for their area.

Mr Sunak said: “Through greater investment in local areas, we can grow the economy, create good jobs and spread opportunity everywhere.”

“By reaching even more parts of the country than before, we will build a future of optimism and pride in people’s lives and the places they call home,” he added.

Levelling Up Secretary Michael Gove said the investment would “revitalise communities that have historically been overlooked but are bursting with potential”.

But Labour’s shadow levelling up secretary Lisa Nandy said the fund had been “beset by delays and allegations of favouritism”.

“And despite today’s announcement, communities across the country are still paying a Tory premium for the last 13 years,” she said.

“It takes an extraordinary arrogance to expect us to be grateful for a partial refund on the money they have stripped out of our communities, which has decimated vital local services like childcare, buses and social care.

“It is time to end this Hunger Games-style contest where communities are pitted against one another and Whitehall ministers pick winners and losers.”

The Local Government Association (LGA) said the allocation of levelling up funding should be “locally led by evidence” of where investment is needed rather than “based on costly competitive bids between areas”.

“This is not a sustainable approach to economic development or public service delivery,” said Kevin Bentley, chairman of the LGA’s People and Places Board.

He also warned fulfilling projects had become more challenging due to rising inflation and costs.

About one out of every four hospitals and community services will be affected by the walkouts, by Royal College of Nursing members, over the two days.

It comes after two days of strikes before Christmas in the pay dispute.

As required under trade union laws, emergency care will be covered during the walkouts from 08:00 to 20:00.

It will mean services such as chemotherapy, kidney dialysis and intensive care will be provided.

The biggest disruption is likely to be in pre-booked treatment such as hernia repair, hip replacements or outpatient clinics, along with community nursing. During last month’s strike action, thousands of treatments and appointments had to be rescheduled.

But GP practices will run as normal, as nurses working in those services are not involved in the strike action.

Saffron Cordery, of NHS Providers, which represents NHS services, said the scale of the walkout and the fact it was over two consecutive days meant it would probably have “greater impact”.

“We’re expecting widespread disruption,” she said. “It will be felt on the day as well in the days that follow.”

RCN general secretary Pat Cullen said nurses regretted the impact.

But she added: “People aren’t dying because nurses are striking. Nurses are striking because people are dying. That is how severe things are in the NHS and it is time the prime minister led a fight for its future.

“Today’s record number of unfilled nurse jobs cannot be left to get worse. Pay nursing staff fairly to turn this around and give the public the care they deserve.”

Clint Cooper, a nurse for nearly 30 years, will cross the picket line on Wednesday to work on a heart-care ward at Scarborough Hospital, in North Yorkshire, while fully supporting his striking colleagues.

“I believe in the principle of what my colleagues are doing,” he says, “but I voted ‘No’, as I cannot walk out and leave my patients.

‘Last week, I had two patients who were very poorly and I wonder if I hadn’t been there and escalated it, would they still be alive, if I had walked out – that’s my conscience talking to me.”

Nevertheless, the government needs to find the money for a bigger pay rise, Mr Cooper says.

‘I’m a Tory voter – I have voted for them at every election apart from one – but I can’t vote for them again,” he says. “The NHS is in crisis.

‘This is not just about pay, it is about the future of the NHS. Nurses don’t want clapping. They want the resources to do their job. They are highly skilled and they are the backbone of the NHS.’

The RCN has asked for a pay rise of 5% above the Retail Prices Index (RPI) rate of inflation, which currently stands at 14%.

The governments in England and Wales have given NHS staff an average of 4.75%, with everyone guaranteed at least £1,400 – as recommended by the independent NHS Pay Review Body.

Talks have been held between the RCN and other NHS unions and Health Secretary Steve Barclay.

Government sources said there would be no movement on this year’s pay award but ministers are considering backdating the 2023-24 rise to January. It would normally kick in in April.

This has already been tabled in Scotland, leading to NHS strikes being halted for further negotiations – although, staff there received a 7.5% pay rise this year.

Mr Barclay said he had had “constructive talks” with the RCN and looked forward to continuing the dialogue.

The RCN, which represents about two-thirds of nurses, balloted more than 300,000 across individual NHS trusts and boards rather than in a single, national vote.

This means some nurses are not entitled to take industrial action, because the turnout in their local area was too low.

The RCN has a mandate in about half of the 209 services in England. The 55 affected this week are different from the 44 targeted before Christmas.

While this week’s action involves nurses in England only, last month’s included those in Northern Ireland and Wales.

The RCN has warned it will hold its biggest walkout yet on 6 and 7 February unless the government moves on pay, involving a third of services in England and all but one health board in Wales.

Ambulance staff and physiotherapists also plan to strike in the coming weeks.