Youth jobs plan is 'insufficient'

18 September 2012 Last updated at 19:49 ET

The government's youth contract is not enough to tackle the scale of youth unemployment, a group of MPs has said.

The youth contract provides £1bn for a range of schemes aimed at getting young people into work.

The Work and Pensions Select Committee said the contract was "a good start" but alone would not be enough "to address the current unacceptably high level of youth unemployment".

Labour said the report showed the government should "change course fast".

The government's youth contract brings together £1bn of funding for a number of schemes, up until 2015, to help get young people into work.

'Eye-catching targets'

Measures include providing 160,000 employers with a "wage incentive" of £2,275 to take on an unemployed 18-24 year-olds, 250,000 work experience placements and additional support from Jobcentre Plus.

If all targets are met, the contract is expected to create an additional 430,000 work opportunities over the next three years.

Dame Anne Begg, chair of the committee, said she welcomed the contract, particularly the increased support from Jobcentre Plus advisers and the widening of work experience opportunities.

The committee also praised the creation of a scheme targeted at 16 and 17 year-olds who are not in education, employment or training - the majority of whom do not receive support from Jobcentre Plus because they are not eligible to claim Jobseekers Allowance.

Dame Anne said: "Some of the measures in the youth contract have been shown to be effective but they will only make a significant impact if all the targets are met.

"Our concern is that there is a real risk that the government will fall short of its more eye-catching targets.

"In particular, past experience shows that 160,000 wage incentives is a very ambitious target in the current economic climate.

"And 250,000 additional work experience placements for young people may also be unrealistic."

'Wake-up call'

The committee said the government needed to widen its criteria for the scheme for 16 and 17 year-olds - which is currently only open to those with no GCSEs.

On wage incentives, the committee said their impact would be "only at the margins" and the government should keep under review the amount it pays employers.

More money may be needed in areas where youth unemployment is particularly high and to encourage the recruitment of disabled people and ethnic minorities.

The committee called for the government to simplify access for employers to the numerous schemes by setting up a dedicated telephone helpline for those who want to offer a job, training or work experience to young people.

Labour's shadow work and pensions secretary Liam Byrne said: "This major cross-party report is crystal clear: the Tory-led government's plan for youth jobs is failing and we need to change course fast."

"This is now a very loud wake-up call, at a time when the country is in a double-dip recession made in Downing Street."

Ronan Dunne, chief executive of O2, said: "Today's report shows that the youth contract hasn't yet had the impact needed to tackle the level of UK youth unemployment.

"I believe that it's not only the businesses that have signed up to the youth contract who can act to help the one million unemployed young people, rather all businesses, big and small, have a role to play in supporting young people on their journey to work.

"This can be anything from offering quality work experience and apprenticeships through to mentoring."

19 Sep, 2012

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Heineken ends Tiger beer standoff

19 September 2012 Last updated at 00:25 ET

Dutch brewer Heineken has ended the standoff over control of the maker of Tiger beer, by garnering the support of a Thai billionaire.

Charoen Sirivadhanabhakdi's ThaiBev and TCC Assets have agreed to back the sale of Singapore-based Fraser and Neave's (F&N) stake in Asia Pacific Breweries (APB) to Heineken.

Heineken has offered 5.6bn Singapore dollars ($4.6bn; £2.8bn).

Analysts said chances of Heineken's bid being accepted by F&N were now higher.

"Thai tycoon Charoen has backed down and handed Heineken a free passage to takeover APB," said Justin Harper from IG Markets in Singapore in a note to clients.

"While he pursues the acquisition of its joint parent company Fraser & Neave."

Last week, Mr Sirivadhanabhakdi, whose companies own about 30% of F&N, made an offer to acquire the rest for almost S$9bn.

It was the latest escalation after months of a bidding war for the assets.

In a joint statement Tuesday, the companies said Heineken will not make an offer for shares in F&N.

Analysts said the two parties appeared to have reached a settlement to prevent the deals costing more for both.

"It could be a win-win for everyone involved. Heineken gets its prized asset of APB, the Thais get a good price which will help fund their takeover of F&N," said Mr Harper.

The board of F&N has already given its approval for the Heineken bid. The shareholders will meet to vote on 28 September.

19 Sep, 2012

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JAL shares rise on re-listing

18 September 2012 Last updated at 20:45 ET

Japan Airlines (JAL) shares rose 2.6% on strong demand, almost three years after it filed for bankruptcy in one of Japan's biggest corporate failures.

JAL shares climbed as high as 3,890 yen, up from its re-listing price of 3,790 yen on the Tokyo Stock Exchange.

The 663bn yen ($8.4bn; £5.2bn) initial public offering comes after the airline was given a government-backed bail out in 2010.

It is the second biggest share sale this year globally after Facebook.

Since it was de-listed from the stock exchange, JAL has taken on huge restructuring, cutting more than a third of its workforce, cancelling unprofitable routes and replacing older planes.

19 Sep, 2012

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Business bank will 'need £40bn'

18 September 2012 Last updated at 19:07 ET

The government-backed "business bank" planned by Vince Cable will need £40bn to successfully boost lending to UK firms, say the think tank IPPR.

It says the bank must also be able to tap bond markets for up to £100bn.

The IPPR also suggests the government allow the bank to invest in infrastructure projects such as road building to help reflate the economy.

The business secretary announced plans for the business bank last week.

Mr Cable has said he hoped such a bank would "shake up the market" and help boost overall lending to firms.

How the bank will be structured and funded is still being worked out.

Sketchy

Details on what form the business bank will take have yet to be revealed. Nor have any details been released about what firms it will aim to lend to, or the length in years of any loan agreements.

Mr Cable, a Liberal Democrat member of the coalition government, has said the details are still in "gestation" but "may" involve some state lending, although the Treasury, with Conservative Chancellor George Osborne in charge, is understood to be against this.

The IPPR's chief economist, Tony Dolphin, said: "Because the chancellor will not spend more government money boosting aggregate demand in the economy, he has been reduced to indirect schemes like funding for lending to support growth.

"What we need in the UK is a fully-fledged British investment bank designed to suit the particular circumstances of our economy."

The think tank points out that the £40bn of government capital it believes is needed to kick start the project is unlikely to appeal to the chancellor as it would make it unlikely he would meet his fiscal targets designed to rein in government spending and cut the gap between income and spending.

19 Sep, 2012

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Rachel Lomax 'no' for Bank chief

18 September 2012 Last updated at 18:41 ET

The former deputy governor of the Bank of England Rachel Lomax says she will not be applying to be the bank's next governor.

The economist - who previously sat on the Bank's Monetary Policy Committee - had been named as the leading female candidate to take over from Sir Mervyn King.

Sir Mervyn is due to step down next year.

Ms Lomax made the remarks to Evan Davis on Radio 4's The Bottom Line.

Ms Lomax, who was deputy governor from 2003 to 2008, discussed her time working for the Bank the lead-up to the financial crisis, and outlined the characteristics she thinks the next governor will need.

She left just before the collapse of Lehman Brothers in 2008.

She described the period she was there as "one of sort of unreal calm for the first four years and then this very terrifying period, the last year I was there, when markets froze.

"We knew that something was bad happening, but we really didn't know, couldn't really imagine how bad it was going to be. I mean, I left the bank just before Lehmans collapsed and it's got a lot more interesting since I left."

She said Sir Mervyn's successor would have a "huge job".

The Bank is adding to its current role and is taking over from the Financial Services Authority.

It will be in charge of overseeing the banking system, financial firms and the system in general to prevent new speculative bubbles appearing.

No women

"It's going to be a very different organization - much bigger and more complex organization than the one that Mervyn King's presided over. So you need someone who can get their mind round that and at least sort of lead the change and put together the team that can implement it."

She said the job was not for her and that "life had moved on". She also expressed disappointment that there are no other credible female candidates.

Ms Lomax is now a non-executive director of HSBC, where she is also a member of several audit and risk committees.

An advert for Sir Mervyn King's replacement was published in the Economist magazine last Friday.

A Bank spokesman confirmed to the BBC that the issue of compensation for the next governor had yet to be decided.

Sir Mervyn benefited from a final-salary pension scheme that will pay him an annual pension of just over £200,000.

His pension basic salary - frozen since 2010 - is £305,000 a year so the Bank may have to offer his successor a less generous pension, and may have to pay a higher salary.

Rachel Lomax appears on Radio 4's The Bottom Line on Thursday, 20 September at 20:30 BST. Listen again to programme via the Radio 4 website or The Bottom Line download.The Bank of England has begun advertising the job of its next governor, but is still "undecided" on what pay and pension it will offer.

19 Sep, 2012

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URGENT URGENT

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Key party quits India government

18 September 2012 Last updated at 12:53 ET

A key regional party has pulled out of India's ruling coalition over its plan to open the retail sector to global supermarket chains and other reforms.

The Trinamool Congress party of West Bengal Chief Minister Mamata Banerjee said that its six ministers would resign from the coalition on Friday.

Ms Banerjee, who is also angry at fuel price rises, said her 19 MPs would not back the coalition in parliament.

Correspondents say the government's parliamentary majority is not at risk.

"My party's six ministers have decided to resign. It is time to fight the battle alone," said Ms Banerjee after a meeting of Trinamool leaders in Calcutta, the capital of West Bengal state.

Earlier on Tuesday Indian India's Finance Minister P Chidambaram insisted that the government was stable despite the unhappiness among its coalition partners over plans to introduce more measures to boost the economy.

"Our allies in the government and outside will understand and continue their support to the government. We will be able to convince our allies," he said.

Delhi's supermarket plan is aimed at reviving a flagging economy, but small shops fear they will be put out of business.

Last year, the government was forced to suspend a similar plan amid protests. Opposition parties have called for a strike on Thursday in protest over the latest moves to attract more Foreign Direct Investment (FDI).

On Friday, the government also announced it would open airlines to foreign capital, sell minority stakes in four state-run companies and increase the price of diesel - all measures that have attracted sharp criticism from across the political spectrum.

Correspondents say that the implementation of many of the reforms will be left entirely to the states, suggesting that some opposed to the changes could opt out.

Other conditions have also been imposed on groups wanting to invest in India.

Companies will have to invest at least $100m (£67m), open outlets only in towns with a population of more than one million and source at least 30% of produce from India, according to reports.

Many of the larger states like Uttar Pradesh, Madhya Pradesh, West Bengal, Bihar and Orissa, which are ruled by opposition parties and Congress allies who are against organised retail, have refused to entertain proposals by global retailers.

Only nine states, including several smaller ones like Delhi, Indian-administered Kashmir, Assam, Manipur and Uttarakhand, support the move.

19 Sep, 2012

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SA miners 'to go back to work'

18 September 2012 Last updated at 12:47 ET

Striking miners at a Lonmin-owned platinum mine in South Africa have agreed to return to work on Thursday, mediators and reports say.

Miners cheered when they were told of a proposed 22% pay rise, a witness told Reuters news agency.

But South Africa's labour dispute body told the BBC it was waiting to hear if the latest pay offer had been accepted.

Last month, police opened fire on demonstrators at the mine in Marikana, killing 34 striking workers.

Production at the mine has been paralysed for weeks and unrest has spread to other mines.

The Commission for Conciliation, Mediation and Arbitration told the BBC a delegation of workers representatives had gone to inform the striking miners of the latest offer this afternoon.

The workers, most of who are rock drill operators, gathered at a football pitch near the Marikana mine to hear the address. They have been demanding a salary of 12,500 rand ($1,513; £935) - they currently earn between 4,000 and 5,000 rand.

"What has happened here has been a victory really for the workers, and they're going to work on Thursday morning," AFP news agency quotes mediator Joe Seoka, the Bishop of Pretoria, as saying.

Bishop Seoka, from the South African Council of Churches, told the BBC there would also be a one-off payment of 2,000 rand to help cover the weeks of not being paid while they were on strike.

He refused to give any further details of the offer.

On Monday, President Jacob Zuma said that the disruption had cost the industry $548m (£337m) in lost output.

19 Sep, 2012

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Uganda confirms new oil deposits

18 September 2012 Last updated at 11:29 ET

Uganda has confirmed the discovery of an additional one billion barrels of oil in the country.

In 2010, it had announced it had discovered commercially viable deposits of 2.5 billion barrels.

However, the commissioner for petroleum exploration told the BBC that deposits were now at least 3.5 billion barrels.

"This is because of new discoveries, and also the ability to extract more oil from existing wells," Ernest Rubondo told World Business Report.

Investors sought

Mr Rubondo said that out of 77 wells drilled so far, 70 contain oil and gas.

Companies such Tullow Oil, Total and CNOOC already operate in Uganda, but Mr Rubondo said he was looking for other investors to join them.

Before that happens, changes to the previous licensing bills have to be made in parliament,

"Bills were passed before the presence of oil was confirmed and now the risk for commercial companies has reduced," he said.

Continue reading the main story

A nation's security of supply for petroleum products enhances its competitiveness"

End Quote Ernest Rubondo Commissioner for petroleum exploration

Critics say that production in existing fields has been delayed by contractual disagreements, tax disputes and infrastructure setbacks.

"When oil is discovered in the middle of the country there are logistical problems which have to be overcome before it can be shipped," Mr Rubondo said.

"You cannot compare it to oil and gas discovered in the middle of the ocean," he said, "where you just have to load it onto a tanker."

He pointed out that anywhere in the world, it can take between eight and 10 years from the discovery of oil on land, to actually extracting it.

Rather than exporting the oil, he said that it was government policy to refine the oil in Uganda to provide petrol, diesel and jet fuel.

"A nation's security of supply for petroleum products enhances its competitiveness," he said.

When commenting on whether ordinary citizens would share in the wealth generated by oil, he said: "There is a communication strategy on our website so stakeholders can see exactly what is happening.

"The constitution provides laws on how local and central governments share the royalties," he added.

18 Sep, 2012

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Fedex warns of weakening economy

18 September 2012 Last updated at 10:19 ET

Global shipping service company Fedex has cut its full-year profit forecast, warning that the global economy is continuing to weaken.

The company, whose earnings are widely watched because of the number of countries it does business in said its net income for the first quarter had fallen 1% on last year to $459m.

Fedex said it expected annual profits to be about 10% lower than expected.

Customers are moving business from air to slower and less expensive routes.

Fedex is the world's second largest package delivery company.

18 Sep, 2012

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