DANIELLE SMITH'S TALKING POINTS

Will Canada's oil & gas industry join Europe's 'green retreat?'

"Impractical time frames" for emissions cuts could drive investment away from the industry

Jeff Lagerquist
Tue, July 11, 2023 

The International Energy Agency sees annual oil demand growing marginally over the next few years, before hitting a peak in 2030.

 (THE CANADIAN PRESS/Jeff McIntosh)

As the world's largest oil and gas companies shrink from climate goals, Canada's fossil fuel industry continues to seek wiggle-room on its own fast-approaching emissions target.

European supermajors BP (BP) and Shell (SHEL) are top fossil fuel players in the energy transition. But recent actions have been dubbed a "green retreat" from the forceful plans they announced a few years ago to embrace renewables and slash emissions.

In February, BP backed off a pledge to cut emissions by 2030, lowering its target from a 35-to-40 per cent reduction, to between 20 and 30 per cent. At the same time, the company deepened its investments in oil and gas.

At Shell, the company's head of renewable generation recently left his role as CEO Wael Sawan pares back green spending. Last month, Shell scrapped its plan to cut oil output by 20 per cent by 2030, opting to keep production steady until the end of the decade, as the company defends its turf as the world's largest LNG firm.

"Oil demand is a really hard thing to make a dent in," said Kevin Krausert, CEO and co-founder of Calgary-based Avatar Innovations, in an interview. "Investors are not going to be happy with oil and gas companies that are basically giving up market share to other players."

Money talks and bullsh** walks. I think that’s what you’re seeing.Canadian public policy consultant Ed Whittingham

The International Energy Agency sees annual oil demand growing marginally over the next few years, before hitting a peak in 2030.

Krausert is an oil field services executive turned venture capitalist who pairs Canadian energy transition startups with some of the biggest firms in the oil and gas sector. He says Canadian producers will struggle to meet Ottawa's industry goal of cutting emissions from operations 42 per cent below 2019 levels by 2030, before hitting net-zero by 2050.

"I think you might see some recalibration. Is it 2030? Is it 2032? Is it 2035?" he said of the interim target. "If it takes us three years to get regulatory approval to build a major [carbon capture] project, and another three years to build it, and we still don't have the fiscal structure in Canada to get some of these projects across the line, you're starting to bump up against 2030."

Kendall Dilling, president of the Pathways Alliance, warns "impractical time frames" for emissions cuts could drive investment away from the industry, reducing production in Canada, while increasing output and emissions in other countries.

The Pathways Alliance, a partnership between Canadian Natural Resources (CNQ.TO)(CNQ), Cenovus (CVE.TO)(CVE), ConocoPhillips Canada, Imperial Oil (IMO.TO)(IMO), MEG Energy (MEG.TO), and Suncor Energy (SU.TO)(SU), is calling for more government financial support for its $16.5 billion carbon capture and storage network. The project, if completed, would be among the largest in the world.

"We can reduce our emissions by 42 per cent from 2019 levels. We have set a goal of net-zero by 2050 from operations. But reaching that as early as 2030 is simply not realistic given current technology, construction and regulatory requirements," he told Yahoo Finance Canada in a statement.

Alex Pourbaix, executive chair of Cenovus' board of directors, calls Shell's shift from green energy to producing more oil a "microcosm" of trends playing out across the industry. Meanwhile, BP is "throttling back their ambition to coincide with the actual ability to decarbonize," he said.

"It's going to be way more challenging, and take a much longer time than I think a lot of people had any idea," Pourbaix said on a July 5 promotional podcast from the right-leaning Canadian news and commentary website, The Hub. "I think a lot of companies and a lot of countries are starting to realize that."

In March, Pourbaix told Yahoo Finance Canada that Ottawa's aim for a 42 per cent drop in operational oil and gas emissions by 2030 is "not feasible by any stretch."

Canadian public policy consultant Ed Whittingham says oil and gas executives are stuck between a rock and a hard place, responding to continued demand for fossil fuels, as well as calls to pivot away from their profitable core business.

"I have a lot of sympathy for these oil and gas CEOs. Investors speak out of both sides of their mouths, saying we want good ESG performance and net-zero, but we want those high returns," he told Yahoo Finance Canada.

"Some of the adjustments you're seeing, especially with the European oil and gas supermajors, are because they made bold statements and promises around diversification from oil and gas, and getting into renewables. They're discovering that's really hard, and they're trying to walk some of that back. But we haven't seen that to the same degree with the Canadian players," Whittingham added.

"Money talks and bullsh** walks. I think that's what you're seeing."

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

SCI FI TEK
California Shows Off New $25 Million Carbon Capture Technology Project

David R. Baker
Fri, July 14, 2023 

(Bloomberg) -- A $25 million project at a Calpine Corp. power plant near San Francisco will test a technology that could capture 95% of a plant’s carbon emissions, a process California officials say is critical to the state’s climate fight.

Carbon capture technology provokes fierce criticism from many environmentalists who consider it a license to keep burning fossil fuels rather than switch to cleaner energy sources. But at the unveiling of the Calpine project Friday, California’s top climate change regulator said some fossil fuel plants will still be needed to keep electricity service reliable as the state moves to eliminate its net carbon emissions by 2045.

“Capturing that carbon, starting as soon as possible, will allow us to stop emitting in situations where we absolutely need these plants for reliability,” said Liane Randolph, chair of the California Air Resources Board.

The pilot project at Calpine’s Los Medanos Energy Center in Pittsburg, California, will use a chemical solvent developed by ION Clean Energy Inc. to bind with carbon dioxide in the plant’s flue gas. ION, based in Colorado, says its process should be both more effective and cheaper than previous carbon capture technologies. Funded in part with a $19 million federal grant, the project will not store the captured carbon, instead releasing it back into atmosphere. In future plants, the carbon dioxide could be pumped underground for permanent storage.

Calpine bills itself as the nation’s largest generator of electricity from natural gas and Chief Executive Officer Thad Hill said carbon capture will be critical for the company. “For us, it represents the energy transition and natural gas’s role in it,” he said.

Protests swell in Tel Aviv for 28th week as anti-government movement vows more 'days of disruption'





 Tel Aviv, Israel, Saturday, July 15, 2023. (AP Photo/Ariel Schalit)


JULIA FRANKEL
Sat, July 15, 2023 

JERUSALEM (AP) — Tens of thousands of protesters packed the streets of Tel Aviv on Saturday night, marking the 28th straight week of demonstrations against Prime Minister Benjamin Netanyahu's plan to overhaul the country's judiciary. Protest leaders promised further “days of disruption” lie ahead.

Netanyahu’s government gave initial approval to a key portion of the overhaul earlier this week, breathing new life into the grassroots movement. The bill still needs to be approved in two more votes, expected by the end of the month, before it becomes law.

Saturday night protests have become a mainstay of the grassroots movement — but this week's was larger than usual.

In Tel Aviv, protesters unrolled a massive banner reading “SOS." They threw paint powder into the sky, streaking it pink and orange. “Handmaids” — women dressed in red robes as characters from the dystopian novel and TV series “The Handmaid's Tale” — once again took to the streets. Their jarring appearance is meant to drive home the notion that, if the overhaul passes, women could be stripped of their rights.

On Tuesday, protesters blocked major highways and disrupted operations at the country's main international airport after Netanyahu's parliamentary coalition advanced a bill that is part of the overhaul. Organizers said they would hold another “day of disruption” on Tuesday if he continues to move ahead with the plan.

The Israeli leader was hospitalized on Saturday for dehydration after suffering a dizzy spell and having spent the previous day in the sun without drinking water. He later released a video from the Tel Aviv hospital, saying he felt good. However, Netanyahu was to spend the night in the hospital, according to his office, and a weekly Cabinet meeting scheduled for Sunday was pushed to Monday.

Saturday’s protest in Tel Aviv was joined by others across the country. Protesters brandished lit torches outside Netanyahu’s home in Jerusalem and demonstrated in the coastal cities of Herzliya and Netanya.

After more than six months of protests, the movement shows little sign of abating. Israel's national labor union and its medical association have joined a long list of groups speaking out against the bill. Military reservists, fighter pilots and business leaders have all urged the government to halt the plan.

Arnon Bar-David, head of the country’s national labor union, the Histadrut, threatened a possible general strike that could paralyze the country’s economy.

“If the situation reaches an extreme, we will intervene and employ our strength,” Bar-David said, calling on Netanyahu to “stop the chaos.”

The Histadrut called a general strike in March as the government pushed the judicial overhaul legislation through parliament after weeks of protest. The move shut down large swaths of Israel’s economy and helped contribute to Netanyahu’s decision to suspend the legislation.

The Israeli Medical Association, which represents 90% of Israeli physicians, joined the Histadrut Friday, voting to “employ all available means, including significant organizational measures” to oppose the reasonableness bill.

The law will “devastate the healthcare system,” the chairman of the association, professor Zion Hagay, said.

The mass protests have taken place since Netanyahu’s far-right government presented the overhaul plan in January, days after taking office. The protests led Netanyahu to suspend the overhaul in March, but he decided to revive the plan last month after compromise talks with the political opposition collapsed.

The overhaul calls for giving Netanyahu’s allies control over the appointment of judges and giving parliament power to overturn court decisions. The Netanyahu government is the most hard-line ultranationalist and ultra-Orthodox in Israel’s 75-year history. His allies proposed the sweeping changes to the judiciary after the country held its fifth elections in under four years, all of them seen as a referendum on Netanyahu’s fitness to serve as prime minister while on trial for corruption.

Critics of the judicial overhaul say it will upset the country’s fragile system of checks and balances and concentrate power in the hands of Netanyahu and his allies. They also say Netanyahu has a conflict of interest because he is on trial for charges of fraud, breach of trust and accepting bribes.

NOTE THEIR PRIORITIES

Glencore, Anglo Join South Africa in $1.5 Billion Water Plan to Supply Mines and Communities



Loni Prinsloo and Antony Sguazzin
Fri, July 14, 2023 

(Bloomberg) -- Some of the world’s biggest mining companies are working with South Africa’s government on a 27 billion rand ($1.5 billion) water project to supply major platinum and chrome operations and several hundred thousand people with drinking water.

Glencore Plc and Anglo American Platinum Ltd. are among the companies attempting to secure half of that amount in financing by the end of the year with the rest of the funds to be sourced by municipalities and the government.

The companies involved in Lebalelo Water Users Association are in talks with about 10 local and international banks for funding, according to Bertus Bierman, its chief executive officer. The project stretches for about 170 kilometers (106 miles) across Limpopo province in northeast South Africa and is expected to be completed by 2030.

The plan is unprecedented in South Africa where almost all water infrastructure, especially initiatives of this scale, have been led by the state. Now, after years of neglect and mismanagement, the government is seeking investment in infrastructure and help in running operations from power plants to rail routes and water facilities.

“This could get a new model into South Africa where government is acting as the regulator and the private entities in partnerships with governmental institutions do more of the work on the ground,” said Bierman in an interview in Pretoria, the capital, this week. “We would like to get construction started early next year.”

Glencore, which operates a chrome smelter in the area, is a global coal and metals mining and trading company, while Anglo Platinum, controlled by Anglo American Plc, is the world’s biggest platinum producer.

Lebalelo plans to build 400 kilometers of pipelines and will supply 250 million liters (66 million gallons) of water a day, about a third of the consumption of Cape Town, which has more than four million inhabitants.

Water will also be supplied to people in the city of Polokwane and Mookgophong, a town north of Johannesburg. Lebalelo’s 16 members also include Impala Platinum Holdings Ltd. and Northam Platinum Ltd. as well as the Department of Water and Sanitation, the Sekhukhune District Municipality and the Mogalakwena Local Municipality.

The project will be rolled out in phases and PricewaterhouseCoopers LLP will arrange the funding, Bierman said, declining to identify the banks that the group is in talks with as the negotiations are confidential.

The project is just one of the initiatives being pushed by South Africa’s government to try and improve the country’s dilapidated water infrastructure.

The state-owned Development Bank of Southern Africa is separately setting up a $1.4 billion facility that will include private investors to fund water reuse projects. State-run companies from the Netherlands and Spain are working with South African counterparts to fund construction in the country.

If the association’s plan is successful the model may be replicated elsewhere in the country, Bierman said. Some of the companies involved in Lebalelo are beginning to discuss a similar energy initiative to generate electricity for mines and communities that could cost about 40 billion rand, he said.

Flipkart makes $700 million payout to employees following PhonePe split


Image Credits: Manish Singh / 

Manish Singh

TechCrunch
Updated Fri, July 14, 2023 


Flipkart commenced a $700 million "one-time discretionary" cash payout to employees on Friday, the single-largest such compensation in the Indian startup ecosystem.

The Walmart-backed Bengaluru-headquartered startup is compensating employees for the separation of fintech PhonePe from the e-commerce group, a move that devalued Flipkart's shares.

The two firms completed a full ownership separation late last year in a deal that was structured to allow shareholders in the Singapore entities of both firms to purchase shares directly in PhonePe’s India entity. PhonePe, in addition to separating from Flipkart, has also moved its headquarters to India and raised $850 million in recent quarters as it bulks its war chest and enters new categories, including e-commerce.

In an email to employees earlier Friday, Flipkart Group CEO Kalyan Krishnamurthy said the "much-awaited compensation will be made today." He added: "We have exciting times ahead, and as we continue to grow across businesses, I look forward to your continued dedication and determination to bring about the future that we envision and scale new heights together."

A Flipkart spokesperson told TechCrunch that the payout had been made. More than 20,000 current and former employees are receiving the payout.

The payout comes at a time when Flipkart has contemplated another round of financing from investors. The firm, which competes against Amazon in India, raised $3.6 billion at a valuation of $37.6 billion in mid-2021. Flipkart, which also counts Tiger Global and SoftBank among its backers, has already exhausted most of that capital, according to a person familiar with the matter.

Flipkart has also been looking to file for an initial public offering for several years, but has deferred the plan due to the ongoing poor market conditions.

The firm's chief rival, in the meantime, is slowing down its growth in India and shutting down some business lines. Amazon said last month that it intends to invest $15 billion in India by 2030 -- $12.7 billion of which it has earmarked for AWS.

Both the firms are facing competition from Reliance, the Indian conglomerate that also runs the nation's largest retail chain. The firm, run by Asia's richest man, Mukesh Ambani, is poised to eventually outpace Amazon and Flipkart in the race for the country’s $150 billion e-commerce market, brokerage firm Bernstein projected in May this year.

Bernstein’s projection hinges on a quartet of compelling advantages that they argue will propel Reliance to the top: a robust retail network, a sweeping mobile network, a holistic digital ecosystem and a “home field advantage” in a notoriously challenging regulatory landscape. These factors should help Reliance seize the majority of the massive e-commerce market in the longer run, the brokerage firm said.

Chinese-Owned Mine Hit by More Delays in Key Peru Copper Expansion Project

Marcelo Rochabrun
Thu, July 13, 2023 


(Bloomberg) -- A unit of state-owned China Minmetals Corp. is bracing for further delays in building a second pit at its troubled Las Bambas copper mine in Peru, while the military there continues to buffer the operation from protest disruptions.

A long-delayed project to mitigate depletion at the current pit was slated to begin in the second half of the year. That’s looking increasingly unlikely due to delays in negotiations with an indigenous community.

“We hope we can finish negotiations this year, but it’s too early in the process yet to know how fast it will go,” Troy Hey, who heads corporate relations at Hong Kong-listed MMG Ltd, said in an interview from Lima. “Once we get an agreement, it’s probably up to three months to get to mining.”

Las Bambas, located in a remote part of the Peruvian Andes, is one of the world’s biggest and most troubled mines. It’s faced recurrent protests from indigenous communities since opening in 2016 at a cost of $10 billion. Blockades and other disruptions have exceeded 600 days in that span, interrupting shipments to smelters in China.

The mine, previously owned by Glencore Plc through its acquisition of Xstrata, can produce as much as 400,000 metric tons a year. But it’s repeatedly underperformed because of protests and declining ore quality. Opening the second pit would see Las Bambas run at full capacity. Without it, the mine will produce about 300,000 tons next year, assuming no disruptions, Hey said.

It’s currently operating with military protection. Tensions reached a peak a year ago when the Huancuire community entered Las Bambas and built a camp on land they had sold to the company for the second pit. Hey said Huancuire members had finally left the area, but that talks were not done yet. MMG is encouraged by new community leadership and is overhauling its approach to community relations, Hey said.

“We are in the best place we have been for a long time in terms of negotiations but it’s tough to see what time-frame it will be,” he said. Huancuire leadership turnover had stalled talks for more than six weeks but MMG hopes to restart negotiations next week, Hey said.

Transporting semi-processed copper from Las Bambas to a seaport has long been the company’s biggest challenge. It uses a mostly unpaved road that traverses about 70 indigenous communities, many of which have long complained about insufficient financial benefit from mining.

President Dina Boluarte has managed to keep copper flowing since March by deploying military to the area. Her administration plans to keep soldiers there until further notice.

“Having police and military presence to keep things calm is not a long-term solution, though I think at the moment we greatly appreciate the support of the government to do that,” Hey said.

Without the military, Las Bambas probably would have seen renewed blockades, he said. “It’s a chronic problem, and so if we do nothing differently we should expect to see the same outcome.”

THE KING AND JUNTA RULE
Thai Election Winner Seeks to Strip Senate of Voting Power

Patpicha Tanakasempipat
Fri, July 14, 2023 

(Bloomberg) -- Thailand’s Move Forward, the party that won the most seats in the May general election, is trying to strip some of the Senate’s powers after the military-appointed upper house of parliament blocked pro-democracy leader Pita Limjaroenrat’s bid to become prime minister.

Move Forward submitted a bill Friday to abolish an article in the 2017 military-backed constitution, which gives the unelected Senate the power to select the prime minister alongside the elected lower house.

This isn’t the first time that someone is trying to challenge the Senate’s voting right. Six attempts have been made in vain since 2020 by political parties and civil society groups to curb the power of the Senate, because such a proposal ironically needs support from at least a third of the 250-member upper house to pass.

Move Forward’s submission came a day after its leader Pita, the sole nominee of the eight-party coalition that has staked a claim to form Thailand’s next government, was thwarted in his bid for premiership by senators, the majority of whom rejected Pita outright or abstained from voting. In doing so, they undermined the result of the May 14 election where voters had overwhelmingly supported pro-democracy parties.

“We don’t know how many times the prime minister selection will be held until it concludes. So, we can do this hand in hand,” Chaithawat Tulathon, secretary-general of Move Forward Party, told reporters at the parliament house. “Since the Senate didn’t want to vote anyway, we’re only looking for a solution for everybody.”

Among the 250-member Senate, as many as 159 members abstained from voting and 34 voted against Pita outright on Thursday. Only 13 backed the popular mandate. But Chaithawat said the party will seek support from more senators for Pita at the next round of prime minister selection next week.

Many members cited Move Forward’s platform to amend Thailand’s lese majeste law, which prohibits criticism of the king or other royals, as a reason for withholding support. Pita has vowed to not back down on the proposal, raising further tension with the pro-military royalist establishment.

The bill was accepted by house speaker Wan Muhamad Noor Matha, who confirmed at the briefing that the second vote to select the prime minister will be held by the joint National Assembly on July 19, at 9:30 a.m. in Bangkok.

“I’ll process this as soon as possible as this is an urgent matter,” Wan said.

 Bloomberg Businessweek

Thailand's Move Forward seeks to curb Senate powers after loss in PM vote


Thailand's parliament votes for a new prime minister

Updated Fri, July 14, 2023 
By Chayut Setboonsarng and Panarat Thepgumpanat

BANGKOK (Reuters) -Thailand's Move Forward party filed a motion in parliament on Friday seeking to curb the power of the military-appointed Senate, a day after the body thwarted its party leader's bid to become prime minister.

The role of the 249-member Senate in deciding a prime minister along with the elected lower house - a system designed by the royalist military after a 2014 coup - is seen as a constitutional safeguard to protect the interests of the generals and the conservative establishment.

Move Forward won the most seats in an election in May but despite being unopposed and having the backing of his eight-party alliance, its leader Pita Limjaroenrat lost the crucial vote on the premiership on Thursday, after the Senate and parties of the outgoing, army-backed government closed ranks to deny him the top job.

Only 13 senators backed 42-year-old Pita, with the rest voting against him or abstaining, which his party said indicated some were acting under duress.

Party secretary general Chaithawat Tulathon filed a motion on Friday to amend part of the constitution, saying "This is a solution that all sides will feel comfortable with".

"There are forces from the old power to pressure the Senate - from the old power to some capitalists who do not want to see a Move Forward government," he said in an earlier television interview, adding it could take about one month to pass.

Pita, a liberal from the private sector, has won huge youth support for his plan to shake up politics and bring reforms to sectors and institutions long considered untouchable.

That includes the monarchy, more specifically, a law that prohibits insulting it, by far Move Forward's most contentious policy and a big obstacle in its attempts to persuade legislators to back Pita.

MAJOR BLOW

Pita vowed on Thursday not to abandon those policies or give up his fight for the premiership. He can run again if nominated in the next vote for the post, which takes place on July 19, the House speaker confirmed.

The defeat on Thursday followed a major blow for Pita on the eve of the vote, when the election commission recommended he be disqualified over a shareholding issue, followed hours later by the Constitutional Court announcing it had taken on a complaint over his party's plan to amend the royal insult law.

The political tension this week had been widely expected.

Thailand has been locked for two decades in a power struggle between reform-minded parties that win elections and a nexus of old money and the military establishment determined to stifle them.

Pro-democracy groups have called for protests. Activist group the United Front of Thammasat and Demonstration took aim at the senators and those who abstained in the vote, calling them spineless and "toxic to the will of people".

Thitinan Pongsudhirak, a political science professor at Chulalongkorn University, called the constitution a straitjacket on democracy, and said systematic attempts to stop Move Forward would see a public backlash.

"These old guard institutions, they need to maintain power because they have a lot to lose," he said.

"The kind of change that Move Forward demands would unwind Thailand's monarchy-centred system and then it would unlock institutional reforms... this would unleash a lot of the competitiveness of Thailand, Thailand's potential."

(Additional reporting by Napat Wesshasarter and Juarawee KittisilpaWriting by Martin PettyEditing by Frances Kerry)

Ambitious liberal fails in first bid to become Thailand's next leader

Thailand's parliament votes for a new prime minister

Thu, July 13, 2023
By Devjyot Ghoshal and Panu Wongcha-um

BANGKOK (Reuters) - In the 60 days since a stunning election victory, the leader of Thailand's Move Forward party forged and managed a coalition, cajoled the royalist military establishment and rallied his troops with a single goal - to become prime minister.

On Thursday, 42-year-old Pita Limjaroenrat failed in his initial bid to win the premiership after he was unable to secure enough votes in a joint sitting of Thailand's 750-member parliament. Another vote is expected to be held next week, which Pita can contest if nominated again.

The setback came despite Move Forward's victory in the May general election, where it emerged the single largest party after running a slick, social-media powered campaign that promised progressive, transparent government to Thai voters.-

But Pita and Move Forward's agenda - particularly a once-unthinkable proposal to amend Thailand's "lese majeste" law - also pit them against the country's powerful conservative establishment, which controls the 250-member appointed senate.

"Give Thailand the opportunity to have a majority government according to the will of the people," he said in a video message on Tuesday, reiterating a call to elected and unelected lawmakers to support him in the bicameral vote.

"I can be a prime minister who runs a country that embraces everybody's diverse dreams," he said.

Yet, by Wednesday afternoon - less than a day before the vote - Pita's quest for power was hit by a double-whammy.

First, Thailand's election commission recommended the Constitutional Court disqualify Pita as a lawmaker because of his ownership of shares in a media company in violation of electoral rules.

Second, the Constitutional Court said it had accepted a complaint against Pita and his party over plans to amend the lese majeste law, Article 112 of the criminal code that punishes insulting the monarchy with up to 15 years in prison.

The actions were a throwback to 2020, when a court ordered the predecessor party of Move Forward dissolved and some of its leaders banned from politics for a decade for violations of election rules.

It was into that breach that Pita - then a first-term lawmaker from a politically influential family with experience working in the technology sector - stepped, becoming the leader of the newly-formed Move Forward.

The position foisted the Harvard University graduate on to the centre stage of Thai politics, which was roiled by a youth-led reformist movement that saw thousands take to the streets, sometimes leading to violent clashes in the heart of Bangkok.

The young protesters took on the military-backed rulers head on, calling for deep-seated reforms, a new constitution and questioning the monarchy's long-held influence on politics and society.

Some of those protesters - and some of those demands - were part of Move Forward's electoral juggernaut, including a call to amend the lese majeste law.

'ABLE TO COMPROMISE'

In a country where many consider the monarch semi-divine, analysts doubted whether a Pita-led Move Forward would be able to push aside a raft of conservative and pro-establishment parties that had dominated domestic politics for over a decade.

At the hustings, Pita drew large, adoring crowds - many of them young voters. The party's trademark orange logo and sharp messaging flooded social media. Late in the campaign, the first-time prime ministerial candidate saw a surge in popularity.

"Vote for Move Forward to change this country together," Pita said in a slick campaign video, taking off a pair of sunglasses and winking.

To millions of Thais weary of an almost decade-long military-backed rule, Pita offered an raft of changes, including increase in minimum wages, dismantling of business monopolies, streamlining of the armed forces and legalising same-sex marriage.

When the numbers rolled in late on May 14, Move Forward not only trounced the ruling coalition but also bettered the populist Pheu Thai Party - the opposition outfit backed by self-exiled tycoon Thaksin Shinawatra, a former prime minister.

The outcome pushed Pita to switch gears from candidate to coalition builder, as a group of seven parties - including the Pheu Thai - coalesced around Move Forward to win power.

"Pita is a democratic representative who can elevate Thailand on the global stage in a dignified way," said Kannawee Suebsang, a member of parliament from the Fair Party, which is part of Pita's eight party-coalition.

"He is a strong leader with charisma but is also able to compromise."

(Reporting by Devjyot Ghoshal and Panu Wongcha-um; Editing by Nick Macfie)

Thailand’s PM Race Can Take a Whole New Turn, Here’s How









Philip J. Heijmans and Patpicha Tanakasempipat
Thu, July 13, 2023 

(Bloomberg) -- After failing to win over Thai conservatives in his first attempt to become prime minister, things are looking increasingly difficult for pro-democracy leader Pita Limjaroenrat to secure a victory even if he were to try again.

The parties outside of Pita’s Move Forward-led coalition and the majority of military-appointed senators are opposed to his key campaign promise of amending the so-called lese majeste law that punishes anyone for defaming or insulting the king or other royals.- 

Also, the Harvard-educated politician risks disqualification as a lawmaker after the poll body found him in breach of election rules — saying he held shares in a defunct media company while running for public office. While he may still go for a second chance at premiership when parliament meets next on July 19, analysts expect support for Pita to wear thin within his alliance should he lose again; although there’s no limit on the number of re-votes he can seek.

“I think they will run him again,” said Kevin Hewison, emeritus professor of Asian Studies at the University of North Carolina at Chapel Hill. Another attempt by Pita will probably harden the stance of conservatives and only weaken support for the pro-democracy alliance, according to Hewison.

The longer it takes for Thailand to form a new government, the more investors will lose confidence in the $500 billion economy whose expansion has been lagging emerging-market peers in Southeast Asia through the pandemic and after. Political wrangling between pro-democracy and conservative groups have also hurt the country’s stocks, bonds and currency markets.

Here are some other scenarios that could play out:

Pita Supports Pheu Thai

Pita could step aside and instead support his coalition partner Pheu Thai, which finished second-place in the May 14 general election and is linked to exiled former leader Thaksin Shinawatra.

Isra Sunthornvut, a former member of parliament for the Democrat Party, said he wouldn’t be surprised if next week Pita throws his support behind Pheu Thai to lead the government “for the sake of the country and democracy.”

The only challenge to this scenario is that Pheu Thai may find it difficult to muster support from the conservatives while still being an ally of Move Forward, which has refused to back down on its push to amend the royal insult law.

Pro-Democracy Group Splits

That could leave Pheu Thai inclined to consider breaking away from Move Forward’s coalition and try forming a government led by one of its three candidates for the post, including real estate magnate Srettha Thavisin and Paetongtarn Shinawatra, the youngest daughter of Thaksin.

Thaksin, who has been considering returning home, had previously said Pheu Thai would not support any attempt to reform the lese majeste law. That makes it easier for Pheu Thai to win enough support from the 250-member military-appointed Senate, helping put a new government sooner than later.

The private sector wants the new government to be in place as soon as possible, so our economy can continue to grow as expected, Thai Chamber of Commerce Chairman Sanan Angubolkul said Friday.

Military-Backed Minority Government

A third scenario involves the Senate supporting a minority government led either by Bhumjaithai’s Anutin Charnvirakul or one of the military-backed parties. That outcome, however, risks sparking protests by supporters of pro-democracy groups.

Since the Senate’s ability to vote for the prime minister expires next year, any minority government is at risk of falling in a no-confidence vote. To guard against that, it’s possible that the establishment may petition the courts to disband Move Forward as what happened in the past to their predecessor, using the push to amend the royal insult law as a pretext, and even annul the election result.

“But that might take some time,” Hewison said referring to the process of disbanding Move Forward and annulling the result. “That said, going to an election quickly is unlikely to produce a different result. But conservatives in Thailand are a balmy lot.”

However, any move to ban the nation’s popular politicians may lead to massive demonstrations. And this time the risks are even higher for the royalist establishment, as protesters have recently been much bolder in directly targeting the monarchy than in previous years.

Such a turn of events could end up hurting tourism, the only economic engine that’s firing on full cylinders and supporting Thailand’s growth amid a downturn in global demand for goods.

--With assistance from Suttinee Yuvejwattana, Cecilia Yap and Anuchit Nguyen.

Thailand's Election Commission says a reformist candidate for prime minister may have broken the law



 Leader of Move Forward Party Pita Limjaroenrat arrives before the signing of a memorandum of understanding on attempt to form a coalition government between Move Forward Party and other parties during a news conference in Bangkok, Thailand on May 22, 2023. 

Thailand's state Election Commission announced Wednesday, July 12, it has concluded there is evidence that the top candidate to become the country's next prime minister, Move Forward party leader Pita Limjaroenrat, has violated election law, and has referred his case to the Constitutional Court for a ruling. (AP Photo/Sakchai Lalit, File)

JINTAMAS SAKSORNCHAI and GRANT PECK
Updated Wed, July 12, 2023 

BANGKOK (AP) — Thailand’s Election Commission said Wednesday there is evidence that the top candidate to become the next prime minister — a reformist with strong backing among progressive young voters — violated election law and referred his case to the Constitutional Court.

The commission’s decision included a request that the court order Move Forward Party leader Pita Limjaroenrat to be suspended as a member of Parliament until the panel issues a ruling.

The alleged violation involves undeclared ownership of media company shares, which are banned for lawmakers. Separately, the court also said it would review a complaint that Pita and his party may have violated the law by proposing to amend Thailand's strict legal provision against defaming the monarchy. Thai media said the court would not make any ruling on Wednesday and that it might need some to consider the issues.

Pita can still be nominated on Thursday when Parliament meets to vote for a new prime minister. But the commission's move raises new doubts about whether he can muster enough votes to get the post, already a struggle because of Thailand's deep political divisions.


The Move Forward Party, with a progressive reformist platform, swept to a surprise first-place finish in May’s general election, capturing 151 seats in the 500-member House of Representatives and the most popular votes. Move Forward has assembled an eight-party, 311-seat coalition with which it had planned to take power.

But Pita's path to power is difficult because he must win 376 votes in a joint session of the House and the conservative, 250-seat, non-elected Senate. The Senate largely represents Thailand's traditional ruling establishment, which suspects Move Forward's proposals for minor reforms of the monarchy endanger the royal institution, which they consider to be the center of Thais' national identity.

Pita's party responded to the Election Commission's decision by questioning its fairness and even its legality. It said its decision was unnecessarily hurried and violated its own procedures by failing to call Pita to give a statement.

The commission had earlier said it acted correctly but Move Forward alleges its members may have engaged in malfeasance, or carrying out duties in a wrongful manner, a crime punishable by 10 years imprisonment and a fine.

The election law complaint against Pita, lodged by a member of a rival party, alleges he ran for office in 2019 while failing to declare his shares in a media company.

The case the commission referred to the court accuses Pita of running for office with awareness that he was ineligible, a criminal violation punishable by maximum imprisonment of three years and/or a fine of up to 60,000 baht ($1,720). The party faces a fine of up to 100,000 baht ($2,865).

Caretaker Deputy Prime Minister Wissanu Krea-ngam, the government’s top legal advisor, has been quoted as saying that a ruling against Pita could be grounds for nullifying the May election results and holding a new election.

There have been fears since the election that Thailand’s conservative ruling establishment would use what its political opponents consider to be dirty tricks to hold on to power. For a decade-and-a-half, it has repeatedly used the courts and supposedly independent state agencies such as the Election Commission to issue controversial rulings to cripple or sink political opponents.

The dissolution in 2019 of the Future Forward party, a forerunner of Move Forward, triggered vigorous street protests by pro-democracy activists that trailed off only when the coronavirus pandemic took hold.

Hours after the Election Commission announced its referral of the shareholding case, the Constitutional Court said it had has accepted a separate petition against Move Forward and Pita concerning their campaign promise to amend Thailand's harsh lese majeste law,.

The law, also known as Article 112, mandates a three to 15 year prison term for defaming the king, his immediate family, or the regent. Critics of the law say it is abused for political purposes, and Move Forward wants changes to rein in such abuses, which it claims actually do damage to the monarchy's reputation.

Royalists soundly reject all efforts to amend the law, and courts have sometimes treated such proposals themselves as tantamount to violating the law. The military and the courts consider themselves stalwart defenders of the monarchy, and the Senate members overwhelmingly share their viewpoint.

If the court agrees that the accused's actions constitute trying to overthrow the constitutional monarchy — a separate provision from Article 112 — they will not be subject to punishment but can be ordered to cease all activities related to their proposed amendment, subject to prosecution if they continue.

Analysis-Thailand's monarchy looms over battle for prime minister
 

Vajiralongkorn, King of Thailand

Move Forward Party leader Pita Limjaroenrat thanks voters ahead 

of the vote for a new prime minister on July 13, in Bangkok


Mon, July 10, 2023 

By Panu Wongcha-um and Panarat Thepgumpanat

BANGKOK (Reuters) - The role of the monarchy in Thailand is at the core of a looming deadlock that could tip Southeast Asia's second-largest economy into crisis, with reformers once again vying to dislodge the grip on power of the royalist military establishment.

Despite a stunning victory with its allies in a May 14 election over pro-military parties, the progressive Move Forward party led by Pita Limjaroenrat faces an uncertain path to government.

The main reason is that part of Move Forward's political platform is the once-unthinkable proposal to amend Thailand's "lese majeste" law, Article 112 of the criminal code that punishes insulting the monarchy with up to 15 years in prison.


In a country where reverence for the monarch has for decades been promoted as central to national identity, the idea is so radical that minority parties and many members of the appointed Senate have vowed to block Pita from becoming prime minister.

"The proposed amendment is disrespectful and is offensive to the monarchy," Senator Seri Suwanpanon told Reuters.

The military has for decades invoked its duty to defend the monarchy to justify intervention in politics, and used the lese majeste law to stifle dissent, critics say.

In parliament, a giant portrait of King Maha Vajiralongkorn hangs over the chamber where on Thursday members will vote for a prime minister.

But the battle over who gets the job could lead to weeks or even months of deadlock thanks to the votes of a 250-seat Senate, appointed by a junta, that could block the election-winning progressive alliance from securing its choice in a combined vote of both chambers.

The system was set out in a constitution drafted after a 2014 coup led by then-army chief Prayuth Chan-ocha, the prime minister whose party lost badly in the May election.

Much depends on whether Move Forward's main ally, second-place winner Pheu Thai, sticks with it or seeks other coalition partners if Pita's bid looks doomed.

King Vajiralongkorn, 70, who has no role in choosing a government, has remained silent on the lese majeste issue since the election. The Royal Palace did not respond to a request for comment.

SWEEPING CHANGE

Move Forward's proposed amendment reflects cultural changes that have in a few years swept Thailand, where the monarch has for decades been held up as almost semi-divine.

On the surface, much remains the same. The king's portrait hangs on city streets and buildings. The nightly Royal News airs the royal family's good deeds.

But subtle changes are evident. In cinemas, many no longer stand for the royal anthem before every film. Satirical memes spring up on social media before the government orders them removed.

The biggest change, however, is political. In the last election in 2019, no party would have dared suggest amending the lese majeste law.

But Move Forward not only dared, it won the most seats in May though the amendment was only one plank of a progressive platform.

The shift emerged with student-led demonstrations in 2020 that began as protests against military rule but evolved into criticism of what the protesters called a military-palace power nexus, and finally into criticism of the king.

Politicians did not lead the protests but Move Forward called for reform of the lese majeste law when activists began to be charged under it.

About 250 of the 1,900 prosecutions linked to the 2020 protests were under Article 112, according to the group Thai Lawyers for Human Rights.

The prosecution of so many under the law pushed the issue into mainstream discourse, analysts say.

"We can now see the real fault line in politics is the role of the monarchy in Thailand's political order," said Thitinan Pongsudhirak, a political analyst at Bangkok's Chulalongkorn University.

NUMBERS GAME

With many senators expected to vote against Pita for prime minister, Move Forward's 312-seat alliance of eight parties in the 500-seat lower House of Representatives may not be enough to secure him the premiership.

To get to the 376 votes he needs, Move Forward and main partner Pheu Thai need to convince 64 lawmakers from the Senate, or from other parties in the lower house.

If Pita falls short, other scenarios come into play.

Pheu Thai, which has 141 seats to Move Forward's 151, could nominate its prime ministerial candidate with the eight-party alliance intact.

Loyal to self-exiled former Prime Minister Thaksin Shinawatra who was ousted in a 2006 coup, Pheu Thai has been more careful in its messaging on lese majeste, so one of its prime ministerial candidates could win enough votes.

Another possibility is that Pheu Thai seeks other partners in the lower house for a coalition without Move Forward. Pheu Thai, however, is vowing to stick with Move Forward.

Titipol Phakdeewanich, dean of the faculty of political science at Ubon Ratchathani University, said using the law to crush dissent had backfired.

"By over-using Article 112, the conservatives dragged the royal institution deeper into politics," he said.

Move Forward says amending the law will prevent its misuse and benefit the monarchy. It wants the penalty reduced to at most a year in prison, and only the Royal Household Bureau to be able to file a complaint instead of anyone.

"Some senators misunderstood ... accusing Move Forward of wanting to topple the monarchy," party executive committee member Amarat Chokepamitkul told Reuters.

"We want to amend it to maintain good relations between the monarchy and the people."

(Reporting by Panu Wongcha-um and Panarat Thepgumpanat; Editing by Kay Johnson, Robert Birsel)

'Like hell': India's burning coalfields

Abhaya SRIVASTAVA
Thu, July 13, 2023

The coal pickers work in brutal conditions, but India's appetite for the fuel is huge (Money SHARMA)

Deadly fires have raged for a century in mines in India's Jharkhand state, where Savitri Mahto is one of 100,000 people risking their lives shovelling coal to supply insatiable demand.

"The land is charred because of the fires," said Mahto, 22, illegally scavenging amid the flames on the edge of a vast commercial opencast mine for the dirty fossil fuel. "We live in fear every day".

Underground fires, which scientists believe started in a mine accident in 1916, create sinkholes that swallow people and homes. Coal pickers and activists report hundreds of people have died over the decades.

"Accidents have happened before, and they keep on happening because the land is sinking," Mahto told AFP, as she tended a stack of burning rocks to produce coking coal, a more stable fuel sold for cooking and firing brick kilns.

"It is dangerous to live here," said Mahto, who dreams of being a nurse. "The houses can collapse anytime."

Coal consumption in India -- the world's most populous nation and fifth-biggest economy -- has doubled in the last decade, powering nearly 70 percent of the electricity grid.

Half of India's greenhouse gas emissions come from burning coal, and only China burns more.

The fires, raging in pockets across opencast mines spread over nearly 300 square kilometres (116 square miles), have burned millions of tonnes of CO2-belching coal, experts say.

Ghostly glowing fires and sulphurous clouds create an apocalyptic feel.

- 'Coal is the lifeline' -

"We have a responsibility towards the society as far as this environment is concerned," said Samiran Dutta, head of the commercial mine operator Bharat Coking Coal Ltd (BCCL), a subsidiary of state-owned Coal India.

Dutta, saying BCCL was not responsible for those entering the mines illegally, added that the company was "procuring various gadgets" including mist sprinklers hoping to dampen air pollution.

But efforts to extinguish the fires, including using liquid nitrogen and cutting trenches as firebreaks, have largely failed.

"The air is heavily polluted," Mahto said, tightening a scarf over her soot-blackened face, saying the constant exposure to poisonous gases burns her eyes and chokes her lungs.

The coal pickers work in brutal conditions, but India's appetite for the fuel is huge.

"Coal is the lifeline of Jharkhand," said A. K. Jha, a local trade union leader, claiming at current production that the mines could last for 200 years, with much of the coal used in the steel industry. "There will never be an end to coal."

Power demands are growing in India -- the world's third-largest greenhouse gas emitter behind China and the United States -- with a growing middle class buying energy-hungry air conditioners and refrigerators.

Barely one degree Celsius of warming to date has made extreme weather more destructive and deadly, and UN climate experts warn the world could breach 1.5C above the preindustrial benchmark within a decade.

India, with 1.4 billion people, points out its per capita emissions are below the global average -- and has pledged to reach net-zero carbon emissions by 2070.

- 'Always scared' -

State authorities began relocating people from the mines in 2008, but many say leaving means losing their livelihood.

Sushila Devi, whose 15-year-old daughter Chanda Kumari died when the land collapsed four years ago while picking coal, said she must stay.

"I am always scared that I might meet the same fate, but I am helpless," said Devi, who earns around six dollars from a day's hard labour. "If I don't work, what will I eat?"

Jha, the trade unionist, says that without other options, illegal coal picking will continue.

"The key question is of livelihood," Jha said. "If the government is unable (to provide jobs), then people will have to make do with what nature has given".

But vegetable seller Arjun Kumar, 32, whose home collapsed due to subsidence, said his "life will be like hell" if he is not relocated, because he will "be forced to live on the streets like a beggar".

For those who stay, Pinaki Roy, 55, founder of the Coalfield Children Classes charity, is offering young coal pickers lessons in English, computers and the arts.

Their last classroom was destroyed by mine blasting, and the replacement looks likely to collapse soon, with Roy pointing out huge cracks in its walls.

"They don't know anything apart from coal," Roy said, as a group of girls practised a dance routine. "We want to show them that there are a lot of other things in the world."

abh/pjm/lb/smw

Brazil wants 10-year pause on deep sea mining as UN agency under pressure to draft regulations




DÁNICA COTO
Fri, July 14, 2023 

SAN JUAN, Puerto Rico (AP) — Brazil on Friday urged a 10-year precautionary pause on deep sea mining in international waters just days after companies and countries were allowed to start applying for provisional licenses.

The call came during a two-week conference held by the International Seabed Authority, a regulatory U.N. agency based in Jamaica that failed to approve a set of rules and regulations to govern deep sea mining by a July 9 deadline.

The agency has not issued any provisional licenses, nor has it received any applications, although the government of Nauru is expected to apply soon for a license via the Canadian-based Metals Co.

The government of the tiny Pacific island said Friday that it wants to diversify its “limited economic base,” but promised it would not sponsor an application during the U.N. conference, which ends July 21.

Nauru noted that its “good-faith decision” does not mean officials are withdrawing their plan to pursue deep sea mining.

“We’re no longer in a ‘what if’ scenario, but ‘what now’?” said Margo Deiye, Nauru’s permanent representative to the International Seabed Authority.

A growing number of countries and companies, including BMW and Volvo, support a moratorium on deep sea mining, warning that extracting precious metals from the deep sea that are used in electric car batteries and other green technology could cause environmental damage.

Brazil’s representative to the International Seabed Authority, Elza Moreira Marcelino de Castro, said the country supports a precautionary pause for at least a decade.

“Priority must be given to the protection of the international seabed until conclusive and comprehensive studies … are available,” she said.

Scientists have warned that deep sea mining could kick up dust storms and cause light and noise pollution, noting that minerals that grow at such depths take millions of years to form. Companies, however, have said that deep sea mining is cheaper and has less of an impact than land mining, while some countries have said it would allow them to grow and diversify their economy.

On Friday, several council members insisted on more scientific studies before any licenses are awarded.

“Exploitation must not commence until it can be guaranteed that there will be no loss to biodiversity,” said Siddharth Shekhar Yadav, Vanuatu’s representative.

The U.N. agency has issued more than 30 exploration licenses, with most of the activity focused in the Clarion-Clipperton Fracture Zone, which covers 1.7 million square miles (4.5 million square kilometers) between Hawaii and Mexico. Exploration is occurring at depths ranging from 13,000 to 19,000 feet (4,000 to 6,000 meters).

The U.N. agency’s 36-member council is working on a proposed framework that would regulate potential deep sea mining, but it’s unclear when it would be ready.

“Exploitation in the area should not be carried out in the absence of rules, regulations and procedures,” Gina Guillén, Costa Rica’s representative, said in a statement that represented the stance of more than a dozen countries.

Australia’s representative said Friday that it was clear draft regulations would not be ready before the conference ends nor by the next meeting scheduled for October and November.

UK

How the pay rise for public sector workers compares to people in the private sector

Connor Parker
Fri, July 14, 2023 

Junior doctors have been striking for a pay rise in recent days. (PA)

Millions of public sector workers were this week offered pay rises of between 5-7% in the coming months.

Teachers have been offered an increase of 6.5%, junior doctors, consultants and dentists 6% and police and prison officers 7%.

These awards apply to those working in England and Wales, with devolved administrations making separate offers to their staff.

Senior civil servants will receive 5.5%, while military personnel are in line for an increase of 5-6%, which will apply UK-wide.

Read more: What the public sector pay rises announced by Government mean for strikes, budgets and inflation

Teachers will be given a 6.5% pay rise. (PA)

The government has ruled out paying for the pay rises with more borrowing or taxes, saying it will be funded from current budgets.

The government hopes the offers will put an end to the wave of strikes that have plagued the public sector for the past year, with several unions already indicating they will accept the offer.

How does it compare to the private sector?

Rishi Sunak has described the pay award as the government's final offer.

However, workers' new pay increase will still be way below the current inflation level of 8.7% - meaning despite the new offer everyone will still be getting a real terms pay cut.

Plus, if the average public sector pay works out at an average of 6.5%, it will still be behind the average for the whole economy.

Charlie McCurdy, economist at the Resolution Foundation, told Yahoo News UK: "Pay growth in the private sector has outstripped the public sector for several years, and we're seeing the effects of this as schools and hospitals struggle to recruit and retain staff."

The latest figures by the Office for National Statistics showed average wage growth was 7.3% between March and May 2023.

This was driven by 7.7% growth in the private sector and just 5.8% in the public sector.

Public sector wage growth before the new pay rise if factored in. (Resolution Foundation)

This data does not factor in the most recent offer, which will not be applied until the start of the financial year - but it doesn't seem like it will be enough to close the gap.

As McCurdy pointed out: "The latest pay settlement will help to address this imbalance – as well as reducing industrial action – though huge questions remain about the future funding of public services and public servants."

Last month, the Resolution Foundation noted that, since January 2022, wages in the private sector have been consistently increasing from around £550 a week to £600 in April 2023.

But in the public sector wage growth has plateaued, it rose steadily from January 2022 to the middle of the year before rising sharply in the final six months of 2022.

Public sector wages are now in line for another sharp growth, but it is yet to be seen if this will catch up with the private sector.

Teachers poised to end strikes as Rishi Sunak unveils public sector pay rise – but doctors dig in



Kate Devlin and Jon Stone
Thu, July 13, 2023

Teachers are poised to end months of strikes after Rishi Sunak announced pay rises of up to 7 per cent for millions of public sector workers – but doctors show no sign of calling off their action.

Teachers have been offered a 6.5 per cent rise and junior doctors 6 per cent, plus an additional £1,250.

But the British Medical Association (BMA) said the below-inflation offer was “exactly why so many doctors (feel) they have no option but to take industrial action”.

As the longest walkout in NHS history got underway, the prime minister told all unions his offer was final and implored doctors to “do the right thing and know when to say yes”.


Downing Street said it would not borrow more money or increase taxes to fund the more than £2bn needed this year to fund the pay rises.

Mr Sunak said more than £1bn would be found by “significantly” raising fees for migrants’ visa applications and access to the NHS.

But roughly the same amount will be found through “reprioritisation” – raising the prospect of cuts. However, it is understood this will be cross-government, removing pressure on individual departments, like education, to find the money for pay rises for teachers.

For her part, education secretary Gillian Keegan promised there would be no cuts to frontline education services.

Ben Zaranko, senior research economist at the Institute for Fiscal Studies, warned that wage increases would eventually require cuts to public budgets; that prompted the BMA to accuse the government of making “ordinary people sicker and poorer”.

Unite union general secretary Sharon Graham said the pay offer would place staff under new pressure and predicted: “I think we’ll be seeing a new wave of industrial action.”

Speaking at a press conference, Mr Sunak said he would accept the recommendations of all the government’s independent pay review bodies; other rises include 7 per cent for police and prison officers, 6 per cent for dentists and NHS consultants, and 5 per cent for members of the armed forces.

He admitted that his announcement would “cost all of you as taxpayers more than we had budgeted for”.

He added: “That’s why the decision has been difficult, and why it has taken time to decide the right course of action. I can confirm today that we are accepting the headline recommendations of the pay review bodies in full, but we will not fund them by borrowing more or increasing your taxes.”

Ministers are struggling to fight persistent high inflation at the same time as bringing to an end to industrial action by groups including doctors.

But BMA chair of council Professor Phil Banfield said the government “missed a huge opportunity to put a credible proposal on the table to end strikes”.

He said consultants “remain willing to talk” but the offer means “they are likely to continue to take industrial action”.

Treasury minister John Glen told the Commons the pay award for teachers “will be fully funded”. As part of reprioritising budgets, the Ministry of Defence will recruit fewer civil servants.

But unions said the decision to fund some of the rises by drawing on departmental budgets was the wrong approach.

Mike Clancy, general secretary of civil service union Prospect, said: “For a prime minister and chancellor who came into office promising economic stability, the chaotic handling of this process will inspire little confidence in workers worried about their futures during the worst cost-of-living crisis in a generation.

“The fact that they are taking a knife to public services to pay for these pay rises signals that they have learned nothing from the austerity years.”

Experts warned the education and health budgets could still face cuts worth billions of pounds, even with frontline services protected.

Mr Zaranko said: “At this point, we can’t say with any certainty where the funding for higher pay rises will come from, although Rishi Sunak has made clear that it will not come from increased borrowing or higher taxes. In the short-term, some could come from under-spends in other parts of the budget, but that’s not a permanent solution.”

He said extra revenue through higher charges for visa applications and for non-British nationals using the NHS would be “unlikely to cover all of the additional cost”. Without rises in borrowing or tax the move will “eventually require either a smaller public sector workforce, or cuts to some other aspect of public service budgets”.

Praxis, which supports migrants and refugees, said that raising “already eye-wateringly high” visa fees risks seeing people fall “deeper into poverty and insecurity”. Josephine Whitaker-Yilmaz, policy and public affairs manager, said migrants in the UK pay some of the highest costs in Europe.

Mr Sunak has promised to halve inflation – to 5 per cent – this year. But the CPI inflation is running at 8.7 per cent, amid fears pay increases are fuelling a wage-price spiral. Official figures released just hours before the announcement also showed the UK economy contracted in May. Ministers hope the decision not to borrow to fund the pay rises will minimise the impact of the decision on inflation.

Final offer: UK's Sunak seeks to end strikes with multi-billion pound pay deal




Teachers rally in Alloa, Clackmannanshire, Scotland

Updated Thu, July 13, 2023 
By Muvija M and William James

LONDON (Reuters) -British Prime Minister Rishi Sunak sought on Thursday to end months of crippling public sector strikes by offering teachers, doctors and other workers pay increases of 6% and above, but warned it would cost billions that could mean cuts elsewhere.

Sunak faces an election in the next 18 months against a backdrop of the highest inflation of any major economy, a near-stagnant economy and a legacy of scandals and missteps from his Conservative Party's 13 years in power. Opinion polls put the Conservatives far behind the opposition Labour Party.

The prime minister said he had accepted the recommendations of independent pay review boards on wage rises for public sector workers, stressing that it was a final offer intended to end months of industrial action.

"This is a significant pay award, it's one of the most significant we've had in decades, and it is costing billions of pounds more than the government had budgeted for and that has consequences," Sunak said.

The package will mean finding an additional 5 billion pounds ($6.55 billion) - 2 billion this year and 3 billion next year - from existing departmental budgets.

"Today's offer is final. We will not negotiate again on this year's settlements and no amount of strikes will change our decision," Sunak said.

Education unions immediately said they would call off planned strikes and recommend accepting the deal. But two unions representing doctors said the offer was unlikely to end strikes.

The pay increases are below Britain's current 8.7% inflation rate but are aimed at bridging the gap following the country's worst bout of industrial unrest in more than 30 years.

Junior doctors will now get a 6% pay uplift and a lump-sum pay increase of 1,250 pounds, while teachers would get a 6.5% raise. Police and the military will get similar settlements.

After more than a year of elevated inflation - which at its peak hit more than 11% - the government is struggling to balance the need to end strikes with rising public debt levels.

It has little room for more spending on wages without either hiking taxes, cutting other public services or missing its self-imposed targets to reduce borrowing.

NO NEW BORROWING

Sunak said the pay rises would not push up inflation because there would be no new borrowing or spending to fund the increases. Teachers' pay rises would be funded by a reallocation of the existing department budget.

Explaining how he would fund the higher salaries, Sunak said measures would include raising a fee paid by international workers to access the country's health service and the cost of securing a visa to enter Britain would also increase.

Other sources of new funding are likely to be closely scrutinised by trade unions, who have said budgets for public sector services such as hospitals are already very tight.

"The government is putting its departments between a rock and hard place," said Unite union General Secretary Sharon Graham. "They now have to choose between paying workers a half-decent salary or cutting services in already underfunded public services."

The British Medical Association, which represents about 45,000 junior doctors in England, said the government's offer was still a pay cut in real terms.

"Today, it missed a huge opportunity to put a credible proposal on the table to end strikes," BMA Chair of Council Phil Banfield said. He added that junior doctors, who are in the middle of a 5-day strike, were likely to continue to take further industrial action.

Ministers have repeatedly stressed the danger that increasing wages too far would undermine its inflation-cutting goal and could entrench rising prices.

However, the Bank of England has been more focused on pay in the private sector, which has risen faster than public-sector pay and has a more immediate impact on the prices of goods and services used to calculate consumer price inflation.

Britain's total debt is just over 100% of GDP, slightly below the average among advanced economies.

($1 = 0.7634 pounds)

(Additional reporting by Kylie MacLellan, David Milliken, Suban Abdulla, Paul Sandle, Farouq Suleiman and Alistair SmoutWriting by William JamesEditing by Kate Holton, Alex Richardson and Frances Kerry)