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Daily Archives: October 11, 2021

Damning Commons Covid report should be seen only as a start

Analysis: Report is not short on lessons but a full public inquiry is needed to get to the bottom of UK’s response to pandemic

It might not have been the immediate public inquiry sought by opposition parties and bereaved families, but the landmark joint report into the UK’s handling of Covid proved less toothless than some feared.

Published almost exactly a year to the day since the MPs’ inquiry was first announced, the “lessons learned to date” report, prepared by two Commons committees after mammoth evidence sessions, is not short on lessons – some of them expressed with notable bluntness.

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Covid response ‘one of UK’s worst ever public health failures’

Early handling and belief in ‘herd immunity’ led to more deaths, Commons inquiry finds

Britain’s early handling of the coronavirus pandemic was one of the worst public health failures in UK history, with ministers and scientists taking a “fatalistic” approach that exacerbated the death toll, a landmark inquiry has found.

“Groupthink”, evidence of British exceptionalism and a deliberately “slow and gradualist” approach meant the UK fared “significantly worse” than other countries, according to the 151-page “Coronavirus: lessons learned to date” report led by two former Conservative ministers.

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Covid timeline: the weeks leading up to first UK lockdown

Key dates in the early stages of the coronavirus pandemic in the UK

31 December 2019: China alerts the World Health Organization (WHO) to dozens of cases of “viral pneumonia” in the central city of Wuhan.

11 January 2020: China reports its first death, a 61-year-old man in Wuhan, from the mysterious new disease. At least seven more patients are in a critical condition.

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More Than 130 Countries Reach Deal on Corporate Minimum Tax

More than 130 countries have agreed on sweeping changes to how big global companies are taxed, including a 15% minimum corporate rate designed to deter multinationals from stashing profits in low-tax countries. 

The deal announced Friday is an attempt to address the ways globalization and digitalization have changed the world economy. It would allow countries to tax some of the earnings of companies located elsewhere that make money through online retailing, web advertising and other activities. 

U.S. President Joe Biden has been one of the driving forces behind the agreement as governments around the world seek to boost revenue following the COVID-19 pandemic. 

The agreement among 136 countries representing 90% of the global economy was announced by the Paris-based Organisation for Economic Co-operation and Development, which hosted the talks that led to it. The OECD said that the minimum tax would reap some $150 billion for governments.

“Today’s agreement represents a once-in-a-generation accomplishment for economic diplomacy,” U.S. Treasury Secretary Janet Yellen said in a statement. She said it would end a “race to the bottom” in which countries outbid each other with lower tax rates. 

“Rather than competing on our ability to offer low corporate rates,” she said, “America will now compete on the skills of our workers and our capacity to innovate, which is a race we can win.” 

The deal faces several hurdles before it can take effect. U.S. approval of related tax legislation proposed by Biden will be key, especially since the U.S. is home to many of the biggest multinational companies. A rejection by Congress would cast uncertainty over the entire project. 

Big U.S. tech companies such as Google and Amazon have supported the OECD negotiations. One reason is that countries would agree to withdraw individual digital services taxes they have imposed on the companies in return for the right to tax part of their earnings under the global scheme.

That means the companies would deal with just the one international tax regime, not a multitude of different ones depending on the country.

“This accord opens the way to a true tax revolution for the 21st century,” said French Finance Minister Bruno Le Maire. “Finally, the digital giants will pay their just share in taxes in the countries — including France — where they produce.” 

On Thursday, Ireland announced that it would join the agreement, ditching a low-tax policy that has led companies such as Google and Facebook to base their European operations there. 

Although the Irish agreement was a step forward for the deal, developing countries have raised objections, and Nigeria, Kenya, Pakistan and Sri Lanka have indicated they will not sign up.

Anti-poverty and tax fairness advocates have said the bulk of new revenue would go to wealthier countries and offer less to developing countries that are more dependent on corporate taxes. The Group of 24 developing countries said that without a bigger share of revenue from reallocated profits, the deal would be “suboptimal” and “not sustainable even in the short run.” 

The deal will be taken up by the Group of 20 finance ministers next week and then by G-20 leaders for final approval at a summit in Rome at the end of October.

Countries would sign on to a diplomatic agreement to implement the tax on companies that have no physical presence in a country but earn profits there, such as through digital services. That provision would affect around 100 global firms.

The second part of the deal, the global minimum of at least 15%, would apply to companies with more than 750 million euros ($864 million) in revenue and be passed into domestic law by countries according to model rules developed at the OECD. A top-up provision would mean tax avoided overseas would have to be paid at home. So long as at least the major headquarters countries implement the minimum tax, the deal would have most of its desired effect. 

 

Murano Glassblowing Model Shattered by Methane Price Surge

The Italian glassblowers of Murano have survived plagues and pandemics. They transitioned to highly prized artistic creations to outrun low-priced competition from Asia. But surging energy prices are shattering their economic model. 

The dozens of furnaces that remain on the lagoon island where Venetian rulers transferred glassblowing 700 years ago must burn around the clock, otherwise the costly crucible inside the ovens will break. But the price for the methane that powers the ovens has skyrocketed fivefold on the global market since October 1, meaning the glassblowers face certain losses on orders they are working to fill, at least for the foreseeable future.

“People are desperate,” said Gianni De Checchi, president of Venice’s association of artisans Confartigianato. “If it continues like this, and we don’t find solutions to the sudden and abnormal gas prices, the entire Murano glass sector will be in serious danger.” 

A medium-size glassblowing business like that of Simone Cenedese consumes 12,000 cubic meters (420,000 cubic feet) of methane a month to keep his seven furnaces hissing at temperatures over 1,000 degrees Celsius (1,800 degrees Fahrenheit) 24 hours a day. They shut down just once a year for annual maintenance in August.

His monthly bills normally range from 11,000 to 13,000 euros ($12,700 to $15,000), on a fixed-price consortium contract that expired September 30. Now exposed to market volatility, Cenedese is projecting an increase in methane costs to 60,000 euros ($70,000) in October, as the natural gas market is buffeted by increased Chinese demand, uncertain Russian supply and worryingly low European stockpiles.

Artisans like Cenedese now must factor in an insurmountable increase in energy costs as they fill orders that had promised to lift them out of the pandemic crisis that stilled the sector in 2020.

“We cannot increase prices that have already been set. … That means for at least two months we are forced to work at a loss,” said Cenedese, a third-generation glassblower who took over the business his father started. “We sell decorations for the house, not necessities, meaning that if the prices are not accessible, it is obvious that there will be no more orders.” 

Cenedese, like others on the island, is considering shutting down one of his furnaces to confront the crisis. That will cost 2,000 euros ($2,300) for the broken crucible. It also will slow production and imperil pending orders.

His five glassblowers move with unspoken choreographed precision to fill an order of 1,800 Christmas ornaments speckled with golden flakes bound for Switzerland.

One starts the process with a red-hot molten blob on the end of a wand that he rolls over gold leaf, applying it evenly before handing the form to the maestro, who then re-heats it in one oven before gently blowing into the wand to create a perfect orb. It is still glowing red when he cuts it from the wand, and another glassblower grabs it with prongs to add the final flourish, a pointy end created from a dab of molten glass applied by an apprentice.

As that dance progresses, another starts, weaving and bobbing into the empty spaces. Together, they can make 300 ornaments a day, working from 6 a.m. to 2 p.m. 

“No machine can do what we do,” said maestro Davide Cimarosti, 56, who has been working as a glassblower for 42 years.

Murano glassblowers decades ago transitioned from wood ovens, which created uneven results, to methane, which burns at temperatures high enough to create the delicate crystal clarity that makes their creations so highly prized. And it is the only gas that the glassblowers are permitted to use, by law. They are caught in a global commodities Catch-22.

For now, artisans are hoping the international market calms by the end of the year, although some analysts believe volatility could persist into the spring. If so, damage to the island’s economy and the individual companies could run deep. 

The Rome government has offered relief to Italian families confronting high energy prices but so far nothing substantial to the Murano glassblowers, whose small scale and energy intensity make them particularly vulnerable. The artisans’ lobby is meeting with members of parliament this week in a bid to seek direct government aid, which De Checchi said is possible under new EU rules put in place after the pandemic.

Beyond economic losses, the islanders fear losing a tradition that has made their island synonymous with artistic excellence. 

Already, the sector has scaled back from an industry with thousands of workers in the 1960s and 1970s to a network of mostly small and medium-sized artisanal enterprises employing some 300 glassblowers. Venice’s glassblowing tradition dates back 1,200 years, and on Murano it has been passed down from father to son for generations. But even at its reduced size and despite its creative rewards, it struggles to attract young people to toil in workshops where summertime temperatures can reach 60 degrees Celsius (140 degrees Fahrenheit).

“The value of this tradition, this history and this culture is priceless. It goes beyond the financial value of the glass industry in Murano,” said Luciano Gambaro, co-owner of Gambaro & Tagliapietra. “Over 1,000 years of culture can’t stop with a gas issue.”