Now listen to Kate Barker, and compare your answer with what she says.

Check your understanding the language Kate Barker uses by matching the words in the box with their definitions (1-8)

Base rate consume incentive plant Capital demand labour supply

 

1. Encouragement or a reason to do something

2. Factories and the machines and equipment in them

3. Money invested in companies, to buy buildings, machinery, etc.

4. The quantity of goods and services offered for sale by companies

5. The rate at which the central bank lends money to commercial banks

6. To spend money on goods and services

7. What people consume and how much they invest

8. Work done by people employed by businesses

ACTIVITY 2

Read the following information and answer “Why doesn't England use the euro?”

The euro is the official currency for most of the member states of the European Union. The geographic and economic region that uses the euro is known as the "Eurozone." Proponents of the euro believe that adopting a single currency over the European economic system reduces the exchange rate risk to businesses, investors and financial institutions. It is also argued that a currency with the backing of the Eurozone economy is better able to compete with the American dollar and other major world currencies. Detractors of the euro monetary system say that too much power is concentrated with the European Central Bank, which sets monetary policy for the euro. This reduces the ability of individual countries to react to local economic conditions.

The United Kingdom is the most notable member of the European Union that has elected not to use the euro. Rather, the United Kingdom uses the pound sterling as its national currency. When the euro was first proposed as a single currency system for the European Union, the Prime Minister of the United Kingdom, Tony Blair, declared that there were "five economic tests" that must be met for his country to accept the euro. The tests are as follows:

1. Business cycles and economic structures must be compatible enough that the United Kingdom could live with Eurozone interest rates.

2. The system must have sufficient flexibility to deal with both local and aggregate economic problems.

3. Adopting the euro must create conditions conducive to firms and individuals investing in the United Kingdom.

4. The euro would enable the nation's financial services industry to remain in a competitive position internationally.

5. Adopting the euro must promote higher growth, stability and a long-term increase in jobs.

Many people in Great Britain believe that the five economic tests, as constructed, set standards so difficult to satisfy that a movement to the euro from the pound sterling can never be justified.

Other Reasons for Not Adopting the Euro

The British government has not wanted to abdicate control of its own interest rate policy, which would occur under a euro system. The system would also remove the current level of comfort with the pound sterling exchange rate; for instance, a British firm or investor who is used to exchanging pounds to dollars or vice versa would be forced to adjust to a euro exchange rate. Additionally, the United Kingdom would be forced to meet the "euro convergence criteria" before adopting the euro, which includes maintaining a debt-to-GDP ratio that limits British fiscal policy. As of 2014, the United Kingdom only met 20% of convergence criteria.

to abdicate – відректися

convergence – конвергенція

ACTIVITY 3

Read the following information and prepare a brief summary of the text.

Aerospace industry

The UK has the second largest aerospace industry in the world after the US, with over 3,000 companies employing about 230,000 people. It’s expected to grow at a rate of 6.8% over the next few years meaning opportunities for overseas investment.

The UK’s civil aerospace sector conducts a lot of research and development (R&D) and investment can help increase productivity and create new jobs for the future.

1. Aerospace companies

More than 3,000 aerospace companies operate in the UK, including BAE Systems, GKN and Rolls-Royce. Other international companies with operations in the UK include: Airbus, Augusta Westland, Finmeccanica, Thales, Boeing, Bombardier.

The UK aerospace sector has the largest number of small and medium sized enterprise (SME) companies in Europe, with 55% of total civil aerospace sales in 2010.

2. Design and manufacturing

The UK has strengths in areas such as: design and manufacture of large aircraft wings, production of aircraft engines, design and manufacture of helicopters, building landing gear systems, creating advanced aircraft systems.

The UK is one of few countries with the resources to design and manufacture advanced helicopters. The global demand for new commercial helicopters is expected to be more than 40,000 units every year, worth $165 billion.

3. Supply chain

Small specialist companies working in the supply chain are important for the aerospace industry. Many supply components and parts to companies in the UK and also overseas through exporting.

4. Producing and maintaining aircraft engines

Rolls-Royce is the world’s second largest aircraft engine manufacturer. The amount of engines produced by the company creates opportunities for manufacturers of components operating in the UK. This also helps to continue demand for servicing and maintaining aircraft engines.

The UK has a large maintenance, repair and overhaul (MRO) sector, servicing the military and civil aircraft that fly from the UK every year. Overall, the UK has a 17% share of the $45 billion global MRO industry.

5. Research and development (R&D)

The aerospace sector spent £1.4 billion on R&D in 2012 which represents 12% of total R&D spend across the manufacturing industry.

UK companies are leading innovation in engine maintenance. At centres like Nottingham University’s Institute for Aerospace Technology, academic researchers are focusing on new power systems and improving the way faults are diagnosed. Companies are also funding the development and testing of new technologies.

6. Employment skills

The UK has a highly skilled workforce which helps UK based companies respond to changes within the industry. Students are able to study a number of different engineering related courses at universities which provide the knowledge, skills and training for working in the aerospace industry.

7. Defense aerospace

Defense is a major part of the UK’s aerospace sector. In addition to BAE Systems, a number of other international companies work on defense projects in the UK.

8. Government is working with industry

8.1 UK government

The government’s joint aerospace industrial strategy done with business was published in March 2013. The strategy specifies what needs to be done for the UK to remain a leader of manufacturing technologies that will help development of new aircraft and technologies.

8.2 UK Aerospace, Defense, Security and Space industries (ADS)

The ADS is the main organization promoting the UK aerospace, defense, security and space industries. The aerospace members committee of ADS represents the UK aerospace industry’s SMEs working in the supply of components, systems and services within the aerospace supply chain. The ADS has helped bring the industry together to work closely with government.

8.3 The Aerospace Growth Partnership (AGP)

The AGP is a partnership between government and industry to work together on addressing the challenges for the future of the aerospace sector.

9. Locations

There are different locations across the UK known as Enterprise Zones that offer investors incentives to locate themselves there including: reduced taxes, simpler planning rules, financial benefits.

Many Enterprise Zones have employment clusters, where businesses from the same sector are co-located within the zones.

UKTI can help overseas companies and investors identify opportunities in the UK’s aerospace sector.

ACTIVITY 4