With one day to go until the Chancellor’s Autumn Statement, the economic outlook is bleak.
Growth forecasts are expected to be downgraded to 1 per cent both this year and next – forcing George Osborne to borrow tens of billions of pounds extra to pay the nation’s bills.
The Organisation for Economic Co-operation and Development is predicting the situation will be even worse, with Britain slipping back into recession at the start of next year.
So it’s imperative that, when he rises to address MPs tomorrow, the Chancellor finally produces a growth strategy worthy of the name.
To be fair, some of the early signs are encouraging.
The plan for the Government to underwrite up to £40billion of loans for small firms may finally get money into the hands of entrepreneurs who have been disgracefully starved of cash by the banks – even those propped up by the taxpayer.
Equally, the delaying of yet another increase in fuel duty and the limiting of the upcoming rise in rail fares to 6.2 per cent will help both businesses and working families – even if the fare hike and cost of petrol remain punishing
Likewise, it is sensible for Mr Osborne to offer tax breaks to compensate firms for the cost of new green taxes (though doesn’t it speak volumes about the pantomime horse coalition that the Tories are having to unpick the harm caused by their Liberal Democrat partners’ obsession with being ‘green’?)
Meanwhile, the scheme to pour tens of billions into building new roads and infrastructure could be the most significant move of all – creating thousands of jobs in the struggling construction industry.
True, some will have reservations about the way it is being funded – namely through £5billion more spending cuts and by asking pension funds to invest £20billion in Britain in return for a future profit.
But, as Mr Osborne acknowledges, this is an ‘exceptionally difficult time’ which requires bold thinking.
Given these ‘exceptional’ circumstances, we urge ministers to scrap their preposterously politically correct decision to spend up to £330million of UK taxpayers’ money ‘fighting climate change in Africa’.
In good times, sending international aid to the likes of South Africa – whose economy is growing faster than our own – to pay for solar power plants would be highly dubious.
To do so when there are more than a million young Britons on the dole, the national debt is rising ever higher and we are having to borrow pension money to help build our schools and roads is wrong-headed in the extreme.
Also:
Anger at aid to help Africa cope with climate change: As UK faces economic meltdown, ministers hand over £330m - Daniel Martin and James Chapman - Daily Mail
South Africa will be one of the main beneficiaries
Energy Secretary to pledge funds ahead of UN summit
Hundreds of millions of pounds of taxpayers’ cash is to be poured into Africa to help it cope with the impact of climate change.
The £330million handout will be spent over the next four years on schemes to install solar power plants and encouraging investment in low-carbon transport.
One of the main beneficiaries will be South Africa, a country which is prosperous enough to have its own space agency.
Chris Huhne, the Lib Dem energy secretary, will unveil the foreign aid package at a United Nations summit on climate change which opens today.
The largesse will fuel criticism from Tory backbenchers over David Cameron’s promise to increase UK spending on aid at a time when public services in Britain are facing swingeing cuts.
Philip Davies, Tory MP for Shipley, said: ‘It is completely unjustifiable to spend so much money at a time when we’re reducing the number of police officers in this country.’
Fellow Tory MP Peter Bone said: ‘What makes it worse is that much of the aid budget is spent on things that are not really benefiting developing countries. The answer is trade, not aid.’
In a sign that the Government is pulling in different directions on environmental policy, George Osborne will announce tomorrow that the Treasury will offer £250million in tax breaks to firms hit by Mr Huhne’s climate change policies.
He will use his Autumn Statement – effectively a mini-Budget – to help companies that use large amounts of energy after being warned that Britain’s plans to cut carbon emissions faster than our competitors was driving business abroad.
Energy-intensive firms such as cement, aluminium and steel makers will get 95 per cent relief from the climate change levy as well as tens of millions of pounds to offset new carbon levies. Mr Osborne insists Britain should not seek to lead the world in cutting emissions and that he is not prepared to bankrupt British businesses by putting them at a competitive disadvantage.
But Mr Huhne is pressing ahead with spending taxpayers’ money promoting green policies in the rest of the world.
In the second week of the UN climate change conference in the South African city of Durban, he is expected to say the aid will go towards a variety of anti-climate change schemes, such as helping African farmers protect their crops against flooding and drought, installing solar panels in villages, and building slurry pits to produce gas for generators.
Projects to target illegal logging in tropical forests will also get cash.
Ethiopia and Rwanda are expected to benefit, as well as South Africa, the most developed country on the continent with an economy which grew far faster than Britain’s last year.
It is not known whether the money will go straight to governments or whether it will be channelled via charities and companies.
Some £282.5million has already been allocated towards aid for foreign climate-change projects. But next week’s announcement will see hundreds of millions more allocated to African climate-change projects by 2015.
Last night critics questioned whether so much money should continue to be ploughed into Africa, where aid money has a history of disappearing as a result of corruption. Just last week, an independent watchdog found that the rapid expansion of Britain’s international aid programme has left it increasingly exposed to fraud.
Julian Morris, president of the London-based think tank International Policy Network, said Mr Huhne’s announcement would be seen as a ‘bribe’.
‘The timing seems to be a cynical move by the British Government,’ he said.
‘It suggests this is an attempt to bribe African governments to sign up to whatever deals the British Government wants them to sign up to in Durban. The money will almost certainly go to foreign governments and do little to improve the lot of the poor.’
Robert Oxley of the TaxPayers’ Alliance said: ‘The Government should be freezing international aid, not increasing it.
‘Rather than throwing money away on corruption and programmes that deliver little of real substance, aid should be targeted at the world’s poorest who really need help.’
A spokesman for Mr Huhne’s Department for Energy and Climate Change would not confirm the total amount, and said it was not new money as it will be drawn from the Coalition’s fully- funded £2.9billion International Climate Fund.
Last night Business Department sources said Vince Cable had been instrumental in raising his concern about the cost of energy and climate change policies on manufacturing businesses, writing to the Prime Minister and George Osborne on the issue in April.
‘They have made considerable capital investment in their British plants to make sure they are energy efficient. This investment shows their commitment to the UK,’ said one.
‘That’s why it’s so vital we don’t repay their faith in Britain with the introduction of a hefty tax, which could see them relocate and result in the loss of British jobs and do nothing about reducing global carbon emissions.’
Click above Daily Mail link to read FULL report from Daniel Martin and James Chapman
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