28 June 2018
Lens on the Week
UK
EUROPEAN INTERVENTION INITIATIVE: A letter of intent has been signed by the UK, France, Germany, Belgium, Denmark, the Netherlands, Estonia, Spain and Portugal to set up a joint military intervention force which could be deployed at times of crisis. This would not be linked to the EU, whose inability to take decisions is seen as a problem. Instead, it would run alongside EU defence cooperation structures which would not include Britain. Italy is expected to join the organisation in due course. How this fits with the decision to exclude Britain from the Galileo programme intelligence sharing remains to be seen. Presumably much depends upon how NATO develops under the Trump administration.
DEFENCE SPENDING: Not to be outdone by the success of Jeremy Hunt in securing money for the NHS, defence secretary Gavin Williamson is seeking an additional £4million per annum (some 10% of the current budget) for defence spending. It is unclear where such money would be found, so a row between the MOD and the Treasury seems inevitable.
TIER 1: In a speech to the Royal United Services Institute, the Labour defence spokesman Nia Griffith committed to keeping Britain at a tier 1 level in military terms. That includes an independent nuclear deterrent, good-quality conventional capabilities and a leading position in cyber technology. This stance is clearly intended to upstage the Conservatives position at a time when they are thought to be questioning defence expenditure and the Prime Minister is known to have queried what capability we need.
BREXIT: A number of companies have broken cover with explicit warnings as to the jobs which the UK might lose as a result of Brexit. First there was Airbus, where the UK currently makes the wings, but this was quickly followed by a suggestion from BMW that they might have to move plants manufacturing Rolls-Royces and Minis overseas. Jeremy Hunt, the Health Secretary, has said it is inappropriate for Airbus to intervene in the debate and Boris Johnson is said to have commented “fuck business” in a discussion with a European diplomat. Mr Clark, the business secretary, on the other hand, is keen that business should be listened to and that the cross EU supply chains on which many British jobs depend should not be disrupted by tariffs.
HEATHROW: Proposals for a third runway at Heathrow, which would increase the number of flights each year from 480,000 to 740,000, were debated by the House of Commons on Monday, a three line whip by the Tories combined with the support of 119 Labour MPs ensuring that the measure passed easily. Labour had given its MPs a free vote, although, slightly inconsistently, Jeremy Corbyn signalled that they might block the expansion of Heathrow if they came to power. Greg Hands, a government minister, defied the whip and resigned. Boris Johnson, who had famously declared that he would lie down in front of the bulldozers, was conveniently abroad at a meeting in Afghanistan and so did not have to decide whether he would support the government or go. The decision has been greeted by threats of legal action from Wandsworth Council, Greenpeace, the Mayor of London and others.
GRENFELL TOWER: In evidence to the public enquiry, an officer of the Fire Brigade admitted that a number of checks required by the Fire and Rescue Services Act had not been carried out on an inspection made shortly after refurbishment. These included the existence of an evacuation plan, checks on the sprinkler system, whether the Tower had radio blindspots and a plan for people with mobility issues. Whether any of this contributed to the disaster will no doubt emerge in due course.
International
IRAN: Strikes and demonstrations have broken out again in Iran. Protests against rising prices erupted outside the Grand Bazaar and the parliament buildings in Tehran and have spread across the country. The expense of the war in Syria and of backing conflict in Iraq and Yemen, and the anticipation of imminent US sanctions, are pushing the country into a financial crisis. The currency – the rial – has lost half its value in the last six months. The regime has reportedly banned the import of more than 1300 products in what appears to be an attempt to strengthen the currency. The protests six months ago began among the poorer classes in provincial Iran; these protests seem to have originated among the traders and middle classes of the capital. There are claims that riot police and other members of the security forces are taking a hard line against these protests as they did against the protests at the beginning of the year.
SPAIN: Ghosts from Spain’s tragic past emerged to haunt the present this week. A court in Argentina has brought 13 charges of torture against a retired police officer, living in Madrid, who is accused of being having been an interrogator in the Information Brigade, a Franco-era intelligence outfit tasked with rooting out the left-wing underground. He cannot be charged in Spain because an amnesty law was passed in 1977, two years after Franco’s death; the officer, Antonio Gonzalez Pacheco, appeared in a Madrid court in 2014, but the case was thrown out because the 1977 law prevents retrospective prosecutions. The 72 year old officer was awarded four police medals before he retired in 1982, which increased his pension by 50%. The new Socialist government has opened an investigation into his case.
Thousands of Spanish babies and children of unmarried mothers or left wing dissidents were taken from their parents and sold by doctors, nuns and priests to ideologically-sound couples during General Franco’s dictatorship. Most of the children grew up unaware that their parents weren’t their natural parents; many are learning the truth only today. There are claims that the practice continued after Franco’s death; an estimated 30,000 babies were taken from their parents for four decades until an adoption law was passed in 1987. This week an 85 year old retired doctor, Eduardo Vela, appeared in a Madrid court, accused of arranging such an abduction (which of course were illegal, but allegedly sanctioned unofficially by the authorities) 50 years ago. He denies the charges.
SYRIA: Government forces are advancing into Daraa province in south west Syria which is one of the last rebel-held areas in the country and which is supposed to be a “de-escalation zone”. They have taken the town of Busra al-Harir and displaced tens of thousands of civilians. The UN says that 45,000 people have fled the fighting, and Jordan has announced that it cannot cope with any more refugees coming over its border with Syria.
Israeli fighter planes destroyed an arsenal near Damascus airport, where rebels claim that a plane from Iran had delivered weapons to Iranian-backed militias.
Financial
SPARKS FROM WAVES: After many schemes, and, finally, a fully costed proposal, the government has turned down a scheme to build a six mile barrage across Swansea Bay to produce hydro-electricity. Mark Shorrock, a prime mover behind a number of green energy ideas had, through his company Tidal Lagoon Power (“TLP”), proposed a detailed proposal for the Swansea barrage, to be followed by another six across various tidal inlets on the western side of the British Isles. The idea is to force the incoming and outgoing tides through turbines in a concrete wall to produce power, with the landward side forming a holding “pond” so that water release can be controlled to, at least to some extent, match power supply to demand. The pond would be, depending on your environmental and political views, a haven for wildlife, or unsightly mudflats which would change the ecology of huge areas. The idea was generally supported by an independent study. However, the government, perhaps unimpressed by costs recently revised from circa £800m to £1.3bn, and certainly not enthused by the necessity of providing a power subsidy or guaranteed price scheme at four times the current market price for electrical supply, has said it will not support the proposal, either for Swansea or elsewhere. Both the Labour Party and Welsh politicians have expressed disappointment that the scheme will not be proceeding, but given the economics, and the possible environmental row such a scheme would provoke, it is perhaps not surprising.
However, whilst this may be the end for the Swansea barrage, it may not be the end for tidal hydro-power as a concept. Wales already has a number of smaller river based schemes. Advancing technology means that more of those local stations can be built at modest cost, or indeed that tidal generators may soon be available which can simply be submerged at sea where tidal ranges permit – such as in the English Channel.
BRICKS FROM STRAW: One of the frequent criticisms made of the house building industry, in the government’s constant urging of it to build new homes to solve the alleged housing shortage, is that the industry buys up building land and then sits on – either to make a profit on escalating values or to prevent rivals getting hold of it. This has never seemed to make much sense, but the government instructed a former minister, Sir Oliver Letwin, to investigate whether it was occurring. Sir Oliver has now reported and he says that he can find no evidence that housebuilders do this – he says that housebuilders make money out of building houses, not speculating in land. Given the cost of holding land, and the housebuilders’ need to use capital as effectively as possible, such activities would be a drag on profits, not a boost.
The report does point out that the housebuilders will buy land from landowners, or take options on land which may gain planning permission, and that those landowners certainly can make large capital gains by procuring planning permission; they may, deliberately or purely fortuitously, find themselves holding land for many years waiting for the planning system to produce consents for development. Letwin says that housebuilders do release newly built houses in volumes which they hope will maintain prices, or at least not produce a local slump, but that is far from hoarding unconsented land to create artificial shortages. As builders know only too well, attempts to control markets can badly backfire if buyers lose interest in buying. The report also points to a growing shortage of skilled building industry labour, and urges both the industry and government to develop a programme to tackle that.
