Nick Clegg, the deputy prime minister, will announce on Tuesday that the UK will introduce a system of shared parental leave from 2015, in a move aimed at getting more women into the workforce and encouraging men to take time off to care for children. Leaders of small businesses have attacked the proposals, which they say will cause “unnecessary friction” between parents and employers. Under the plans, a mother will still be entitled to 52 weeks’ maternity leave – three-quarters of it paid – but will be able to trigger flexible leave at any point after the first two weeks, either “chopping up” the time by taking it in turns with her partner or taking time off together. The only rule will be that no more than 12 months can be taken in total, with no more than nine at guaranteed pay. In theory, a new husband could take a year off for childcare duties – by combining standard two-week paternity leave with the last 50 weeks of his wife’s allotment. (Financial Times*)
International Development
Natural disasters hinder progress in Asia
Asia’s rapid economic progress risks being undermined by the rising number of floods, landslides and other natural disasters that hit the region, according to a new report by the Asian Development Bank, published today. The bank’s study provides a stark reminder that Asia and its many densely populated and rapidly expanding coastal cities are particularly vulnerable to weather-related disasters such as storms and floods. Disaster-related losses could top $19bn a year, and the increasing frequency and severity of natural disasters could “slash economic growth and development,” the report commented. Weeks of flooding in low-lying areas of Thailand, for example, paralyzed much of the country’s manufacturing sector and caused billions of dollars in damages late last year. Similarly, floods and landslides cost China some $18bn in 2010 alone, the bank said. (New York Times)
Corporate Reputation
Regulators to probe unusual gas trades
UK regulators are investigating an alleged attempt to manipulate the country’s natural gas market. The UK Financial Services Authority (FSA) and the Office of the Gas and Electricity Markets (Ofgem) are investigating unusual price activity in late September in the ‘National Balancing Point’ (NBP), a so-called virtual hub that serves as the main pricing point for UK natural gas. NBP is the most active gas market in Europe, attracting billions of dollars of physical and financial transactions from utilities, hedge funds and banks. Edward Davey, UK energy secretary, said in a statement he was “extremely concerned” about the allegations of manipulation. The investigation comes only days after US regulators said they were seeking a record fine of $435m against Barclays for allegedly manipulating the electricity market in California between 2006 and 2008. (Financial Times*, Bloomberg,BBC, Guardian)
US groups grilled over tax payments
The head of Google UK and top managers from Starbucks and Amazon appeared before the Public Accounts Committee (PAC) on charges of tax avoidance on Monday. Starbucks admitted the Dutch Government had granted a special tax deal on its European headquarters, which receives royalty payments from its UK business. Amazon and Google also confirmed they used favourable European tax jurisdictions for their UK businesses. Amazon’s sales are handled out of Luxembourg, while Google’s advertising space is sold by a team in the Republic of Ireland, the executives confirmed. Margaret Hodge, who chairs the committee, said she thought it was right for customers to boycott the three companies. “One of our concerns is that the ability of global companies to choose where to they put their costs and their profits gives them an unfair tax advantage that damages UK-based businesses,” she said. Members of the committee accused the of being evasive under questioning, and failing to present fully, the information demanded of them. (Financial Times*, BBC, Independent)
Policy & Research
EU freezes airline carbon charge
The EU will suspend for one year a controversial policy of charging foreign airlines for their carbon emissions on flights to and from Europe, citing progress in negotiations towards a global regime to tackle pollution by the aviation industry. On Monday Connie Hedegaard, the EU climate commissioner, announced the suspension of a policy that was opposed by the US, China, Russia, Brazil, India and several other countries. The EU carbon emissions trading scheme had also drawn complaints from European airlines and Airbus, the Toulouse-based aircraft manufacturer. European Commission officials denied bowing to international pressure to scrap the scheme. They attributed the move to positive results last week in talks at the UN’s International Civil Aviation Organisation about a potential international agreement. “For the first time in years, a global deal on aviation should be in reach,” said Ms Hedegaard. She called the ICAO high-level group “very good news”. (Financial Times*, Wall Street Journal)
COMMENTS