Issue 98: 2017 03 30: Week in Brief: UK

30 March 2017

Week in Brief: UK

Union Jack flapping in wind from the right

Westminster

ARTICLE 50: Britain has served notice under article 50 of the Treaty of Lisbon, beginning the two year countdown to its exit from the EU.

LABOUR: Shadow Brexit secretary Kier Starmer has set out six conditions which his party will require if they are to back the final Brexit deal in the Commons.  Slightly bizarrely one of the test is whether the deal will deliver exactly the same benefits as our current membership of the Single Market and Customs Union.  Read literally that would indicate that Labour would prefer no deal (i.e. reliance on WTO tariffs) to marginally decreased access to the market.  Mr Starmer also said that the Prime Minister should now commit to establishing transitional arrangements running from the end of the two-year period, apparently overlooking the fact that such arrangements can only be put in place with the agreement of the EU.

WESTMINSTER ATTACK: After days of speculation in the press, the Metropolitan Police have come to the conclusion that Khalid Masood who murdered four people, including a police officer, in last week’s attack at Westminster Bridge and at the Houses of Parliament, was acting alone.  Despite thorough investigations into his background and the questioning of a number of his associates, the authorities have not been able to identify any conspirators.  As a “one-off” attack the incident has few implications as to the likelihood of similar incidents occurring.

Home Secretary Amber Rudd has called for WhatsApp to produce the texts sent by Masood immediately prior to the attack.  Unfortunate, however, the texts are encrypted so that is not possible.  Ms Rudd has called for a “backdoor” through which encrypted text can be read but it is questionable whether this can be achieved without undermining the privacy of communications generally.

EX UKIPPER: Douglas Carswell, the MP for Clacton, has left UKIP, now without any representation in the House of Commons.  Carswell was not a natural fit for the party but joined it because of his belief in the importance of getting Britain out of the EU.  Now, job done, he is leaving it.  For the time being he will sit as a cross bench MP but he has not ruled out a return to the Conservative fold at some stage.

Holyrood and Stormont

SCOTTISH PARLIAMENT: The Scottish parliament voted by 69 votes to 59 to request a further referendum on independence before Britain leaves the EU.  The UK has already indicated that it will not agree to this, inter-alia because the level of uncertainty during the negotiations will mean that the people of Scotland do not have a fair choice.  Previously it had been suggested that the Scottish Parliament might arrange a non-binding referendum but this seems to be impracticable because those who oppose independence could invalidate it by not participating.  The most likely outcome is that if Scotland is not satisfied with the terms, and the SNP is still in power, there will be further calls for a referendum in about 2021.

NORTHERN IRELAND: Talks designed to re-establish power sharing in Northern Ireland have reached an impasse with Sinn Fein failing to designate a deputy first minister.  Power sharing came to an end in January following a dispute over a green energy project.

Money and Mergers

NEW COINS: The replacement of the old circular 1 pound coin by the new 12 sided version should be bad news for forgers.  The new coin has the latest anti-fraud technology, important at a time when it is estimated that one in 30 coins is counterfeit.  It is slightly larger and slightly lighter than the pound we are used to – presumably reflecting a change in the alloy.  Since the coin is not made of gold, however, that is a matter of convenience rather than an attempt to dupe the public.  The coin is to be introduced over six months and slot machines throughout the country have been adjusted, except for those on Tesco trolleys however where conversion is yet to take place.  Tesco’s have some 200 stores with trolley locks and for the time being those locks will be disconnected.  Tesco say that there will be additional staff available to assist customers, presumably at stores where the locks are back in use.

STOCK EXCHANGES: The proposed £21 billion merger of the London Stock Exchange and the Deutsche Borse, already threatened by Brexit, has been blocked by EU competition regulators.

Court News

PRINCE GEORGE: It has been announced that Prince George is to attend Thomas’s school in Battersea, a mixed sex primary school.

Compensation and Courts

OFCOM: Consumer groups have welcomed proposals by Ofcom that suppliers of telephone and broadband services should have to compensate customers automatically for missed appointments and failure of service.  The compensation for missed appointments would be £30 whereas failure of service would result in payments of £10 a day.  It is estimated that currently 2.6 million people would receive compensation each year at a cost of some £185 million.

SON OF WHIPLASH: It used to be whiplash, now it is bogus holiday sickness claims.  Law firms and claim companies are targeting holidaymakers, telling them that they can make claims against the organisers of package holidays for stomach bugs and other minor sicknesses on the basis that in the case of minor claims only a verbal confirmation of the sicknesses is required.  The Solicitors Regulation Authority is investigating 15 firms, suggesting that some of them have made illicit payments to claim management companies.  The area is particularly remunerative for lawyers because holiday sickness abroad is not covered by rules limiting fees.  ABTA has called for those rules to be changed but one cannot help thinking that a simpler answer might be a few high-profile prosecutions followed by deterrent sentences.

DIVORCE RULING: The press and legal establishment have reacted with outrage at the refusal of the Court of Appeal to overrule a High Court ruling that a woman, Mrs Owens, could not to divorce her husband because he had not reached the threshold for unreasonable behaviour set by the Matrimonial Causes Act 1973.  There are two questions here.  The first is why this came as such a surprise.  The law is fairly clear and, where the threshold of unreasonableness is not met, to obtain a divorce against the wishes of the other party the plaintiff needs to show five years of separation.  That is the rule set by Parliament and it is hard to see how the judges can be criticised for applying it.  The second is whether Parliament should change the law.  In many jurisdictions it is enough to show that the marriage has broken down and perhaps the time has come to update our law along these lines.  It is been suggested that the case will go on to the Supreme Court.  It is hard to see that there is much point in this.  The correct approach is surely to lobby for a change in the law.

Social Media

YOUTUBE: Pressure on Google to remove terrorist materials from its platforms is increasing following videos on YouTube exploiting the Westminster bombing.  The bill for lost advertising has been estimated at $750 million a year.

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Issue 98: 2017 03 30: Can you be a soldier? (Lynda Goetz)

30 March 2017

Could You Be A Soldier?

Marine A and the National Army Museum.

By Lynda Goetz 

Sergeant Alexander Blackman (also known as Marine A), who was convicted of murdering a wounded Taliban terrorist in November 2013, has had his conviction overturned and replaced with one for manslaughter on the grounds of diminished responsibility.  His original sentence was for life with a minimum term of 10 years and that sentence has now been reduced to seven years.  Given that he has already been in prison for three and a half years, the compulsory part of the term, it is expected that he will be freed within the next fortnight, much to the relief and jubilation of his wife, Claire, and his many supporters.  There are nevertheless many others who consider he should serve the full term for his ‘crime’.

Marine A is ‘the first British soldier ever convicted of murder on a battlefield’.  This, if you pause for just one second, is an amazing fact, given the millions who have fought in modern conflicts around the world.  Not one of those who fought in the First and Second World Wars was hauled before a court in this way; and although the discredited Iraq Historic Allegations Team (IHAT) and Northmoor operations have investigated thousands of soldiers for alleged murder, torture and rape in Iraq and Afghanistan, no-one else has ever been convicted of murder on a battlefield.  Is it this fact which should surprise us or the fact that anyone should have been convicted of murder on a battlefield?

In years gone by, war was something which affected many of those in the population.  Local lords and squires were expected to raise armies, or, at the very least, to contribute men to whatever war their king was currently undertaking.  Leaders and civilians had an understanding of war based on participation in one form or another.  Right up to and including the Second World War, conflict was in many ways close to the civilian population.  Everyone had a father, brother, cousin, friend or fiancé who was involved.  Even if those who were actually involved found it difficult to communicate the horrors they had seen and participated in, war was nevertheless something relevant to those ‘back home’.  Recent conflicts have not been like that.  As a result the distance between the civilian population and the soldiers has increased and the understanding has lessened.

How many of us can imagine really what it is like to kill another human being?  Move on from that and imagine that that is your job – to kill and be killed.  In past centuries our leaders came from those who understood this perfectly, who had indeed achieved their own status because of their own superior ability to succeed in battle; the David Beckhams and Roger Federers of the battlefield, rather than the sports field.  Nowadays those skills are not required and our politicians and leaders, including our military leaders, may not have extensive, or indeed any, experience of combat.  Modern rules of warfare are drawn up by such people.  That there are such rules is progress, but when they are applied it must be recognised that the way humans behave in the heat of battle, or indeed in the aftermath of battle, is not the same way the rest of us would behave or expect others to behave in ordinary day-to-day life.

Perhaps then it is appropriate that at this point in time the National Army Museum in Chelsea is re-opening following a three-year re-vamp at a cost of £24 million.  The museum is, contrary to popular view, independent of the army but offers an insight into the world of soldiering and war for today’s largely civilian population.  It opens to the public today, 30th March, but those who have had the chance to preview the new museum seem to have been universally impressed by its new incarnation.  Gone are the fusty exhibits and confusing layout.  According to Tabish Khan in The Londonist, money has been well spent and ‘the designers have done a five-star job’.  Mark Hudson in The Telegraph is equally impressed and considers that the museum achieves the difficult balancing act of being both ‘anti-heroic’ in its attitude to war, whilst at the same time managing to communicate the combination of life-enhancing camaraderie, fear, boredom and repetitive duties which make up army life.  Both use the term ‘thought-provoking’.  Maeve Kennedy in The Guardian rather limits her comments to the fact that the museum hopes to attract increased visitor numbers with its assembled memorabilia, including the Duke of Wellington’s cloak and the skeleton of Napoleon’s horse, but is the only one to attribute the impressive airy new design to BDP architects (http://www.bdp.com/) who must take credit for transforming the original dark and confusing interior.

‘Could you be a soldier?’ is the question asked of visitors to the first of five centre piece galleries.  Accounts and words from soldiers over the last 200 years illustrate various aspects of soldiering and as visitors leave they are asked the question again.  It would be interesting to find out the answers.  I suspect that for many, many of us, including those who have judged Sergeant Blackman, it would be ‘no’.  We should perhaps therefore be very careful when judging those soldiers, sailors, airmen or marines who fight on our behalf and whose job it is to kill or be killed.  It is not a job most of us would want or be capable of.  That Sergeant Blackman is no longer considered a murderer is good news.  That his case has highlighted the contemporary gulf between the military men on the ground, some of their superiors and the general public, is something which perhaps in a small way the National Army Museum can help to address.

The National Army Museum (https://www.nam.ac.uk/) Royal Hospital Road, SW3 4HT.  Admission Free.

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Issue 98: Crossword – Great Captains

30 March 2017

Crossword by Boffles

Great Captains

 

To see a printable version of this crossword

Issue 97:2017 03 23:Contents

23 March 2017: Issue 97

Week in Brief

UK

International

Financial

Comment

Silence is golden by Robert Kilconner

Hardball negotiations

 Moving the interest rate goalposts by Frank O’Nomics

The Bank of England has forgotten its mandate

March down South              -photo Janis Higgie

The politics of envy by John Watson

Mr Osborne’s portfolio

Justice or Injustice? by Lynda Goetz

New Rape Evidence Rules Not Good News

Features

 Poo Bags by Chin Chin

An image for the 21st century

Slaves of the Machine by Neil Tidmarsh

Robots don’t take our work – they just ensure we don’t get paid for it.

Puzzles and Cartoons

Crossword, by Boffles: “Varied Entertainment”

Solution to the last crossword “Spring”

Cartoons by AGGro.

Earlier EditionsLarge 600x271 stamp prompting the reader to join the subscription list

Issue 92: 16 February 2017

Issue 93: 23 February 2017

Issue 94: 02 March 2017

Issue 95: 09 March 2017

Issue 96: 16 March 2017

Issue 98: Crossword – Great Captains – printable

30 March 2017

Crossword by Boffles

Great Captains

Across

    1  Self-promoting naval one? It’s fiction (10)

    8  Company and church include his for Apache leader (7)

    9  Cook was the first European to …… his feet on Australian soil (5)

  10  He was red but discovered a land of a different colour (4)

  11  Polish one who died in a plane (not helicopter) crash (8)

  13  Discoverer of mainland North America (5)

  14  Khan more of a spiritual than a military leader (3)

  16  Dashing quality possessed by, for example, Nelson and Prince Rupert (4)

  17  Confederate commander (3)

  20  …… Bakr al-Baghdadi – a highly undesirable and destructive one (3)

  21  Scholarly down-under cricketer? (7)

  23  Our very own one –  under another name (1,1,8)

 

Down

    1  Vietnamese and Argentinian revolutionaries combine in French Revolutionary general (5)

    2  Down-under cricketer prepared to comment (6,6)

    3  Odysseus devised the Trojan Horse as such to entice the Trojans (4)

    4  Gaul of superhuman strength who fought the Romans –  but perhaps more a lieutenant (6)

    5  Scott was one and Cook another (8)

    6  US one with a plan (8)

    7  Attacked both Roman Empires (6)

  12  Was a Roman soldier but now our protector (2,6)

  13  Certainly not a silly old geezer as the rhyme claims (6)

  15  Was his discovery of the Pacific reported in the Panama papers? (6)

  18  Admiral  Sir Reginald Plunkett-…..-Erle-Drax  – could he not choose between one name with north and one without? (5)

  19  Wrong right for famous victory of Muhammad (4)

  22  General commanding the Myanmar army and no Goon! (3)

 

Issue 98: 2017 03 30: Full Circle (Robert Kilconner)

30 March 2017

Full Circle

Should the EU go for a fighting retreat?

By Robert Kilconner

Just occasionally absentmindedness can be a good thing, particularly if the result is that you forget to go to the bookshop.  “No thriller this week” you think glumly.  None of those Booker shortlisters will be gracing your bedside table.  The only answer is to go on a foraging expedition around the house and see what you can find on the shelves.  That often means reading something way out of your normal range.

That is how I came to be reading Full Circle, the autobiography of the post-war prime minister Sir Anthony Eden.  It is a long and detailed account of his involvement in the politics of the 1950s, first as Churchill’s foreign secretary and then, following the retirement of the great man, as prime minister himself.  It ends with the disaster of Suez, ill health and resignation.

As is often the case in self-justificatory accounts, he gives a little too much detail and too little of an overview.  All tactics and not enough strategy, the military might say.  Still, he was a decent man who, faced with the collapse of the Imperial world order, tried to make sure that withdrawal was properly carried through and left robust structures in place.  To him and his American, French and German colleagues must go credit for the recovery of Germany and laying the foundations on which that now flourishing democracy has been so successfully built.  A huge achievement, surely, but elsewhere the picture is less rosy, and reading his account of imperial withdrawal, not a lot turned out as he would have hoped, many of the compromises which he helped to broker ultimately collapsing.  Indochina, Cyprus, Iraq, Malta, all these were to go wrong in due course.

Reading Eden’s account one cannot help but feel that this was a man working hard at yesterday’s game. The European powers were withdrawing from Empire.  That was a given, but his assumption that he would receive the support of a coalition of the willing headed by the US turned out to be naive.  The reality was that British power was ebbing so fast that we would not be able to command American support in the face of anti-colonial sentiments among their electorate.  He didn’t see this and that is why he was surprised by the hostility of the US during Suez.  That is why, in the end, he needed to be replaced by the far more modern and realistic McMillan.

When you get to the decision to halt the invasion of Suez with the job half done, the clarity of Eden’s narrative disappears.  He lists the various pressures to which we were subject, in particular the financial pressure exerted by the US, but he does not put his decision to halt operations down to the need to give way to them.  Instead he talks about the objects of the expedition being partly met in that fighting between the Egyptians and the Israelis had stopped and feeling that enough had been achieved.  It comes across as a huge loss of nerve but you wouldn’t expect him to say that in his autobiography, would you?

When I picked the book up I thought that I was in for a history lesson on the end of Empire.  That turned out to be true but there is plenty in Sir Anthony’s experiences that is relevant today.  In particular, two things stood out.  The first arose in the context of a proposal to create a European army, the idea being that a separate German military force might be used in the wrong way.  In the event it came to nothing but it is interesting to note that, although the UK was in favour of the proposal, we always refused to take part.  Why was that?  Well, Eden argued, and it seems to have been generally accepted, that the European army would be a step on the path to a united Europe and that, because the UK was a pragmatic country, it would not fit in with the more theoretically inclined continentals.  Plus ca change some 60 years on.

The second thing is more subtle.  Withdrawal from Empire was a retreat, and retreats are harder to handle than advances.  It is so in the military theatre where a successful fighting retreat is regarded as one of the highest achievements (remember the lines: “Not a drum was heard, not a funeral note…”, composed as a tribute to Sir John Moore who died in conducting the successful retreat to Corunna).  It is so in politics too.  Now apply that principle to what is happening in the EU at present.  Britain, of course, is leaving but that probably has about equal elements of the advance and retreat about it.  From the EU’s point of view, though, there is much more of a choice.  They can batten down the hatches and, if the French and German electorates allow them to do so, ignore their current pressures and push on as before.  That might look like an advance but in reality the drive towards centralism has lost momentum and it would be putting up barriers to protect the status quo.  Alternatively, they could move to the front foot with a plan for reforms designed to remove the financial tensions between Germany and the south, to tackle the discontent among the Eastern members and to allow those who do not want to lose political independence to participate on a more à la carte basis.  Which way should they go?  Retreat into old ideas or advance into new?  The first may sound safer but I am not sure about that.  Unless you have leadership of the highest quality and a good measure of unity to boot, fighting retreats are very very difficult.

 

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Issue 98:2017 03 30:Week in Brief International

30 March 2017

Week In Brief: INTERNATIONAL NEWS

UN Flag to denote International news

Europe

BELGIUM:  An armed Frenchman of Tunisian origin drove a car at speed towards shoppers in Antwerp last Thursday.  He was stopped by troops  fled but was caught and arrested.  No-one was hurt.  A pump action shotgun was found in the car, together with knives and a can containing a liquid.

BULGARIA:  The pro-EU centre right party the European Development of Bulgaria won a snap election, defeating the Socialists.  Its leader, Boyko Borisov, will become Prime Minister for the third time if he can form a coalition.

EU:  Leaders celebrated the 60th anniversary of the Treaty of Rome.  Poland and Greece object to plans for a multi-speed Europe, fearing that smaller nations will be left behind and that their voices will not be heard.

This week, the UK has delivered the letter officially notifying the European Council of Britain’s decision to leave the EU.

FRANCE:  Presidential candidate and National Front leader Marine le Pen visited Russia where she met President Putin in the Kremlin and MPs in the Duma.

Presidential candidate and Republican Party leader Francois Fillon admitted that accepting three suits worth €13,000 as a gift from a lawyer was a mistake and said that he has given them back.  It has also emerged that he accepted two watches worth more than €27,000 as gifts from businessmen when he was an MP and prime minister.

M. Fillon’s British wife Penelope Fillon was charged with embezzlement and fraud.  Magistrates in Paris placed her under formal investigation over allegations that she accepted payment from the state for non-existent jobs between 1986 and 2013.

Police shot a Chinese man dead in his home in Paris, in front of his family.  Hundreds of people demonstrated in a protest which sparked violent riots; 35 arrests were made, 3 police officers were injured and a police car was set on fire.

GERMANY:  The TGD (Turkish Community in Germany) has asked its members to vote ‘no’ in next month’s referendum in Turkey about changing the constitution from a parliamentary system to a presidential system.  Four million German citizens have Turkish origins; there are 1.4 million Turkish voters in Germany; the TGD has 60,000 members.

A state election in Saarland defied national polls, with Chancellor Merkel’s Christian Democratic Union beating rival Martin Schulz’s Social Democratic Party.

ITALY:  The Italian Parliament intends to summon charities to answer allegations that rescue ships are collaborating with people traffickers and providing a “taxi service” for immigrants to cross into Italy from Libya.  22,000 migrants have been put into boats this year and 175,000 are already in reception centres.

NORWAY:  Five Turkish military officers who were stationed in Norway in NATO posts have been granted asylum.  They were recalled to Turkey after the coup but refused to return.

RUSSIA:  An estimated 60,000 protesters in Moscow and more than 70 other towns and cities demonstrated against government corruption.   Over a thousand people were arrested, including opposition politician Alexei Navalny who had called for the protests.  Police ordered everyone from the offices of his Anti-Corruption Foundation, where staff were streaming online coverage of the protests.  The police claimed that there was a bomb scare and fire alert in the building.  They cut off the electricity supply, seized computers and arrested 12 people who refused to leave the office.  They were sentenced to between 5 and 15 days in jail.  Navalny was sentenced to 15 days in jail and fined 20,000 roubles.

UKRAINE:  A former Russian MP, Denis Voronenkov, was shot dead in Kiev.  His bodyguard was injured and the gunman was killed.  President Poroshcenko has blamed Russia for the assassination.

Middle East and Africa

DEMOCRATIC REPUBLIC OF CONGO:  Forty police officers were captured and killed when their convoy was ambushed by armed militia fighters in Kasai province.

GAZA STRIP:  Hamas closed the border with Israel, following the murder of a militant commander which they blame on Israel.

IRAQ:  The largest mass grave of Isis victims discovered so far was found at Khafsa, five miles south west of Mosul.   It could contain thousands of bodies; the deep sinkhole in which they were disposed of is so full that it is contaminating local wells and springs.

The coalition fighting the Battle of Mosul to free the city from Isis is reassessing its tactics after reports from Amnesty International and other organisations that hundreds of civilians have been killed by its airstrikes on western Mosul.

SYRIA:  Airborne attacks have been launched against Isis on the Euphrates dam west of Raqqa.

YEMEN:  On the second anniversary of the conflict in which President Hadi was driven out of the country by Houthi rebels, a court in the capital city of Sanaa convicted him of high treason and sentenced him to death.

Far East, Asia and Pacific

CHINA:  Satellite photos published online by the Center for Strategic and International Studies appear to confirm that China has turned three reefs in the disputed Spratly Islands into military bases.  China has claimed that its development of the reefs has been for “international public services”.  A verdict in the international court in The Hague last year denied China ownership of the area.

HONG KONG:  Pro-Beijing candidate Carrie Lam was chosen as Hong Kong’s new leader by the city’s election committee.  The next day, nine activists who took part in the pro-democracy “Umbrella Movement” protests in 2014 were told they will be prosecuted for their actions.

JAPAN:  The founder of a new school told parliament that Prime Minister Abe’s wife gave the school a cash donation of one million yen (7,200) on behalf of her husband.  Prime Minister Abe is being drawn into a scandal about land being sold by the state at a fraction of its value for the establishment of the school, founded to teach a traditional, militaristic ethos.

KOREA, NORTH:  Investigators in the USA suspect that Pyongyang is robbing banks around the world in order to fill state coffers.  They have found that code in malicious software which the FBI have confirmed was used by North Korean hackers in the cyberattack on Sony pictures in 2014 is similar to that used by hackers in an attack on the central bank of Bangladesh and in attempted attacks on a number of Polish banks.

PAKISTAN:  Pakistan has begun to build a fence along its border with Afghanistan in Bajaur and Mohmand districts, in order to frustrate cross-border Taliban operations.  Kabul has objected.

America

REPUBLICA DE NOTICIAS FALSIFICADAS:  The republic will sign a free-trade agreement with the UK towns of Dover, Hastings, Sandwich, Hythe, Romney, Rye and Winchelsea this Saturday (01.04.17).   The negotiations began last week, and were successfully concluded after only 3 hours and 25 minutes.  The deal increases recent fears and rumours that Britain’s ancient Cinque Ports are about to make a unilateral declaration of independence from the UK, thus avoiding the lengthy process of political devolution followed by independence referendums.  The republic’s President Yad Sloof-Lirpa (a graduate of the University of East Sussex and Kent – he has a first class degree in Medieval Studies) has hinted that the Cinque Ports will announce their UDI when the agreement is signed in Dover Castle (the residence of the Lord Warden of the Cinque Ports) this Saturday.

USA:  President Trump’s healthcare reforms were rejected by Republicans in the House of Representatives.  The reforms weren’t put to the vote because they couldn’t find sufficient support.

President Trump signed an executive order overturning Obama’s curbs on carbon emissions and measures against climate change. He said that the order was intended to boost the USA’s coal-mining industry.

Jared Kushner, President Trump’s son-in-law, will be the head of a new agency, The White House Office of Innovation, which will aim to increase the efficiency of the Federal Government.  He has also been summoned to appear before the Senate committee investigating Russian interference in the presidential election, following the revelation that he had meetings with the Russian ambassador and with the head of a sanctioned Russian bank.

Democrats demanded that the Republican Devin Nunes steps down as chairman of the House intelligence committee investigating Russian interference in the elections, following allegations that he is briefing the President on his findings but not the rest of the committee.

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Issue98:2017 03 30:Week in Brief Financial

30 March 2017

Week In Brief: BUSINESS AND THE CITY

NEWS, the word in pink on a grey background

NOTHING HELPS:  When it was first announced, the proposed Tesco purchase of Booker was hailed as the final mark of the supermarket giant’s recovery from the accounting scandal and poor performance which have damaged its reputation over the previous four years and seemed to confirm that new chief executive Dave Lewis had truly started a new era.  Booker was a good fit with Tesco – if you take out some of the competition in the small “mini-market” business which is increasingly over-provided and where rationalisation of the Budgen and Tesco Metro chains would bring direct costs savings but give Tesco access to Booker’s core business of supplying the wholesale catering business where it is a market leader and enjoys rapid growth.  Most analysts praised the logic of the deal and the deal making skills of Mr Lewis and his team.  Until now, that is.  There seems to have a been a change of sentiment especially amongst some Tesco shareholders who are canvassing support for the deal to be cancelled, mainly on the grounds that Tesco is paying too much.  Also of concern is that the regulators concerned about competition in the retail food market (Tesco alone has over 21% of the market) will force the sale of more local stores than would be good for the supermarket chain.   Mr Lewis’s views in response have not been shared but Tesco has now issued a formal statement in response to the remarks and the rumours of shareholders combining to possibly try to stop the deal.  They say that the transaction remains on course and is good value for the group.

Some analysts say that for all Mr Lewis’s success in turning the Tesco business around and back to profitability, he has not been great at managing his main shareholders; several large institutions are significant holders including Schroders and Artisan Partners who hold 9% and have asked the board to withdraw, citing nervousness about renewed expansion so soon in the recovery programme.  A little more pre-discussion might help next time.

LIKE A HURRICANE:  The oil price slowly slides back from its recent circa  peaks of circa US$60.  It is now trading just above $50 with more pressure on future price trends.  In the USA Mr Trump is likely to dismantle at least some green energy measures which will enable coal and shale oil and gas to step up profitable production, and even in the UK, new oil reserves are being found offshore.  The latest is to the west of the Shetland Islands and has been discovered by Hurricane Energy which has been prospecting in this area for some time and believes it has discovered a major field.  Although it has long been suspected that there is oil under the Atlantic coast here, the practical difficulty was always how it could actually be extracted from such deep and stormy waters.  The ocean has not become any less difficult or forbidding, but the technology of extraction has much improved, so that platforms and drills are more robust and maintaining them easier.  And cheaper – at $50, such reserves can be extracted profitably – which is also the case for shale oil.  The thinking behinds OPEC’s attempts to restrict output from its members is that offshore reserves and shale need a breakeven price of $70/75 to work – but improvements in drilling have pushed that cost right down.  $50 seems to be the mark now and that could well mean that it is about what we will be paying for the basic barrel for the foreseeable future.  Most OPEC members can produce very profitably at that level of course, but as we have explored before, many OPEC members have got used to very high oil revenues and cannot meet their ongoing obligations without more of it.  They may have to learn…

BLOWN AWAY:  One of Britain’s great success stories in combining need and technology to produce profits is Dyson, founded by Sir James Dyson, who began by producing an improved vacuum cleaner, and is now a major producer of many products which move air – hand driers, humidifiers, heaters and so forth.  The products are well designed and well-engineered – and sell at a major premium to the competition; such is the benefit of brand reputation.  Dyson has kept much of its research and product development in its base in Wiltshire, but increasingly makes most of its products in the Far East, largely in Malaysia.  It has also recently opened a new plant and research facility in Singapore.  That increasingly looks like a clever move – Dyson saw profits rise 41% last year and most of that is from sales in the Far East, both to increasingly wealthy households in China and those in the rising nations ringing the South China Sea.  As Dyson is a private company it does not publish actual profits, but it did say that turnover was up 45% to £2.5bn, and that gross earnings were £630m – a remarkable margin in competitive products.  Half that comes from vacuum cleaners, but the growth now is in the company’s other products, where it is increasingly selling to business – hand dryers for company wash rooms for example.  The USA remains Dyson’s biggest market, with the UK second, but China is now fourth and India is starting to figure on the company radar – and that is where Dyson sees the next big area of growth.   India is not an easy market for overseas makers to break into, with high tariff and ownership barriers, but Dyson’s strategy is to start manufacturing there before long, and possibly form a partnership with a local company to help them sell and build.

FROM AIR TO WATER:  A warning to Dyson – what was once a similar much praised British success story, now struggling to regain momentum, is changing its name.  Wolseley was a leading brand of plumbing suppliers with a network of outlets across the UK and a great reputation for quality and price.  After twenty five years of unbroken profit growth things went very wrong – starting from that common problem, a US acquisition which very quickly started draining money out of the business – just as a downturn hit the UK building market.  The American business eventually got turned round but the UK end has never really got back to where it was.  The company has just announced that the improvement in profits seen last year has been sustained into the first half of this, showing £515m, and to consolidate on that recovery Wolseley will become “Ferguson”, the name of the American business.  That will emphasise where it performs best – the Nordic business will be sold and the UK business will see further cuts – the best growth message for the present time will continue to be the USA.

KEY MARKET INDICES:  (as at 28th March 2017; comments refer to changes on last 7 days; $ is US$)

Interest Rates:

UK£ Base rate: 0.25%, unchanged: 3 month 0.34% (slight fall); 5 year 0.80% (rising).

Euro€: 1 mth -0.37% (steady); 3 mth -0.33% (steady); 5 year 0.13% (falling)

US$: 1 mth 0.98% (rising); 3 mth 1.15% (rising); 5 year 2.00% (falling)

Currency Exchanges:

£/Euro: 1.16, £ rising

£/$: 1.26, £ rising

Euro/$: 1.08, € rising

Gold, oz: $1,243, rising

Aluminium, tonne: $1,918, slight rise

Copper, tonne: $5,774, slight fall

Oil, Brent Crude barrel: $51.8, steady

Wheat, tonne: £148, rising

London Stock Exchange: FTSE 100: 7,343 (slight fall). FTSE Allshare: 3.997 (slight fall)

Briefly: Dollar short term interest rates continue to edge upwards, though for the first time for a while the movement up in long rates has reversed – this could well be a response to what is increasingly forecast as the economic consequences of Mr Trump, an early boom followed by a slowdown.  The rest of the market continues pretty steady – with oil still keeping above the $50 mark and wheat shifting upwards again.

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Issue98:2017 03 30:Family Matters (J.R.Thomas)

30 March 2017

Family Matters

An old fashioned virtue

by J.R.Thomas

There is an expression popular in the media, the “Westminster bubble”.  It is one those pithy phrases that seems to summon something up, even though nobody ever seems quite sure what it is.  Whatever it means, the effect of living in that Westminster bubble does seem to do something odd to those who ply their strange trades round that crumbling palace by the Thames.

The last couple of weeks have seen a series of incidents which must make  the outside world regard what goes on at the bottom end of Whitehall as some sort of unreality show, the particpants’behaviour dreamed up by a team of scriptwriters deprived of sleep and kept alive only on coffee and peanuts.  We had News at 10 – not the ITV version but the Downing Street version where sources at No 10 revealed that they had strongly warned about the lack of clarity and vision in the Chancellor’s National Insurance proposals, but that the silly man had gone ahead and done it anyway.   Sources at No 11 said that No 10 had been at all times fully involved and utterly approving of some light mulcting of the self-employed and that it was fully in accordance with the Conservative manifesto for the 2015 election (which anyway was not signed off by us, guv).  Anyway, they continued, they are all economically illiterate next door.   Have to get us to work out the milk bill for them.  Don’t even have batteries in their calculators.

Mr Timothy, who is the man who carries Mrs May’s second handbag, the one with the steel club in it, has not, we are told, taken this well, and although Mrs May and Mr Hammond were careful to sit close together in the Commons last Wednesday and endorse each other’s views that the reversal of the NI proposals was all part of a strategic tripping up of Mr Corbyn (it certainly succeeded), and to laugh at each others’ jokes, it was noticeable that Mr Hammond was careful not to turn his back on Mrs M, and word is that there will be no shared pizzas for supper for a while.

But our interest in this matter is not in the shambles in the policy making which seems to have occurred.  It is in the aggression and rudeness of the parties involved.  We all know the old adage about your enemies being behind you in the Commons, and your opponents being those opposite, and it is true enough;  but one of the features of Parliamentary life, indeed British life in general, is that a superficial politeness and elegance always prevails except in the most extraordinary circumstances.

Ms Sturgeon did not get the memo on that one, or maybe it was thrown unread in the bin by Mr Salmond, but here rudeness about her neighbours may in be a product of the increasingly difficult position she is in politically.  The ScotNats are a natural party of protest and it is possible that they had not prepared for actually running Scotland.  Even after ten years of on the job training they don’t seem to have learnt much.  Certainly, things have not gone their way since they took on the governing role, what with the Referendum going the wrong way (not that Referendum, the 2014 version), and the oil price collapsing. And they have suffered, probably of more immediate interest to Scottish voters, a series of minor disasters in domestic matters – over-running projects, the startling decline in the Scottish educational system, the messed up merger of the Scottish police forces.  Even the much applauded reopening of the Waverly railway line, the largest passenger railway reopening in these islands, has run at nearly twice budget and the railway has the worst punctuality record in the country.  So one political solution is to find a distraction, and what better than another referendum on Scottish independence, and a chance to throw rotten cabbages at the woman next door?  It might not excuse the rudeness, but everybody understands the need.

Unlike the Hogg Case, as we might call it.  Ms Hogg is undoubtedly very bright and has had a noticeably successful career, with the ultimate banker’s accolade of a position at the Bank of England.  Then came the Deputy Governorship, a seat on the Monetary Policy Committee, and a nod that the Governorship might be hers when Mr Carney returns west, or wherever he might go next.   But Ms Hogg has two big crosses to bear.  Firstly, she is a member of a famous dynasty which has achieved much in public life; and second, she is not a monetary or indeed any other type of economist.  There is not much she could do about the former; and she has never claimed to be the latter, though she might have been prudent (given the first factor) to make very clear the second.  At the hearings of the House of Commons Treasury Committee on her appointment, she forgot to mention, has forgotten at all relevant times to mention, that her brother is a director of Barclays Bank.  Not surprisingly, perhaps, as he is not a board director, but simply holder of a director title, something used widely by City banks to make its staff seem more important than they are; Barclays is said to have a thousand of them and at RBS and Lloyds there are even more.  He was not relevant to Ms Hogg’s job or her proposed elevation – in fact the Committee might more interestingly have asked why a member of such a distinguished dynasty has not risen higher than that.  Unfortunately she was caught on the hop by a technical question on quantitative easing (a question which we suspect many members of the Treasury Committee could not have answered without a bit of careful brooding). But Ms Hogg is not an economist, she is an operating type and that is how she has risen.  She is good at making things work, which is something the Bank needs as Mr Carney sighingly reminded everybody after the matter had run its course.  Nobody alluded to this though; her failures, which are not really failures, have simply been the excuse for a massive amount of rudeness, verging, or rather more than verging, on invective regarding nepotism and lack of economic talent.  Much of that sounds like jealousy of her talent and a demeaning of the capabilities of her sex.  Exit Ms Hogg; exit a talent sorely needed by the Bank; and exit an example to minority strugglers everywhere of how to break though City glass ceilings.

And so it goes on; the really awful stuff expressed about Mr Trump, much of it coming from persons who regards themselves as civilised and educated (or Hollywood celebrities, which is not the same thing at all). You may not like Mr Trump, you may think he is going to be a disaster, but he is the democratically elected head of state and representative of a nation, so at least be polite if you can’t be nice.

And the other Referendum Campaign, the 2016 one, not the 2014 one.  Was there any need for all that bile and nastiness?  It was a key decision affecting our futures.  It deserved serious and thoughtful debate, not two choruses of mutual vituperation.  We have all got to get along with each other as we go through the next processes, we should not end up a nation divided by bad language and vulgar slanging. You don’t have to be nice, you don’t have to pretend (much) but at least be polite.

So time to make nice guys and gals learn the old fashioned courtesies, behave as grandma would like.  Read John Major’s elegant intervention on Brexit last week, a model of how to make a dissenting case without rudeness.  Watch Harold MacMillan and Harold Wilson elegantly disagree; listen to Churchill or Reagan dispatch with humour.  Time to recover our manners, please.  Pretty please?

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