12 April 2018
Lens on the Week
UK
MRS MAY’S HESITATION: In the next few days Britain will have to decide whether to participate in the US’s airstrikes against Syria in response to the chemical attack in Douma. So far it has been France which has taken the initiative, egging Trump on and offering its support. Mrs May has held back, seeking more information and reluctant to move without parliamentary authority. It might appear churlish to withhold support following the diplomatic action taken by the international community in the wake of the Salisbury poisoning. If Russia and its allies need to be faced down, why would we not play our part? And yet two memories haunt Whitehall. The first is of the misreading of intelligence on weapons of mass destruction which lead to the second Iraq war. The second is the fact that reflex interventions by the West in the Middle East have generally been counter-productive.
It is only sensible to wait until we are sure, but then the need to stand shoulder to shoulder with our allies will probably swing it. Presumably the hardware is being quietly moved into position.
BREXIT: Timing is everything and the Issue of Border Posts in Ireland contrary to the Good Friday agreement is now coming back centre-stage. Indeed it begins to look as if it will still be the outstanding point when practically everything else has been settled. What will happen then? Will it mean, as M Barnier perhaps hopes, that the UK cannot leave the single market or customs union? That would be the tail wagging the dog with a vengeance since it would prevent the free trade future which is one of the main benefits of our leaving the EU in the first place. Will it be solved by leaving Northern Ireland in the market and making the Irish sea the barrier? Quite apart from the political difficulties in Ireland itself, such a decision would open a debate in Scotland which could not be contemplated at this stage. That leaves us with a barrier in Ireland, either physical or imposed through some form of leaky reporting system.
The Good Friday Agreement is of enormous importance but it is not a sacred text. Treaties have to be changed to meet new circumstances, and if a barrier can be devised which does not significantly impact on cross border business and travel, what of it? We are talking about real peoples’ lives here and how they will be affected. To drown the search for possible solutions with a megaphone debate about red lines and how the “boys” would smash the security cameras, serves none except for those anxious to torpedo the Brexit process. In the end the issue is not big enough to torpedo it, but it needs solving, and if the only solution requires minor changes to the Good Friday Agreement that will need to be done. Shadow International Trade Secretary Barry Gardiner was right when he referred to the agreement as a shibboleth. It needs to cease to be one.
VIOLENT STREETS: The discussion of the rising level of street crime was always going to get political. What is the cause? Police cuts, reduced stop and search, social media? All are candidates, the selection normally being made to suit political preference. The truth must be that all are to blame in part and it can make no sense to exclude the funding squeeze which now erodes many areas of the national fabric. Of course they have some effect: otherwise we would have been wasting pre-austerity expenditure. The question is how austere we really need to be and how we can make best use of the resources we have. The debate on what we should do about crime depends as much on Mr Hammond as on Ms Rudd.
International
SYRIA: There are claims that a chemical weapons attack killed more than forty people in Douma, the last rebel-held town in the Damascus suburb of Eastern Ghouta. Regime forces are accused of dropping a barrel bomb of chlorine gas, having lost patience with an evacuation/withdrawal agreement which faltered when an extremist Islamist rebel group – the Army of Islam – apparently refused to put down its heavy weapons. Russia has denied that any such attack took place, while at the same time blaming rebel groups for the attack (to give the USA the excuse to attack Assad, it claims); the Syrian regime has denied the attack, as has its other ally Iran.
President Trump has threatened reprisal attacks by the USA. He has the support of President Macron of France; UK prime minister Theresa May is calling for more evidence. A UN security council resolution demanding a full investigation was blocked by Russia (only Bolivia supported Russia’s veto – even China abstained).
Elsewhere in Syria, an airstrike on the Tiyas airbase near Palmyra killed 11 Syrian and 3 Iranian soldiers. Russia has blamed Israel for the attack. It seems that the White House was informed of the attack before it happened, but the Kremlin was not; there is usually co-operation between the USA and Russia over such attacks, to avoid Russian casualties.
FRANCE: President Macron’s plans to reform the French economy are meeting resistance from trades unions and leftist groups. Railway workers are on strike, universities have been blockaded and rubbish collections stopped. Other public employees are threatening action. Two thousand riot police dispersed an anarchist settlement near Nantes, clearing 100 huts and 200 activists from a site at Notre-Dames-des-Landes occupied in 2008 when the building of an international airport was planned there. Arrests were made during violent clashes between the police and activists.
ELECTIONS: In Hungary, the hardline anti-immigrant populist prime minister Viktor Orban won a third term with a landslide victory. His Fidesz party now holds 134 of the 199 seats in parliament. His attempts to control the judiciary and the media, his plans to shut down refugee charities, his hostility to George Soros, and his refusal to accommodate immigrants, have all been criticised by other European countries.
In Colombia, a leader of the former rebel group Farc (now a political party) has been arrested and charged with drug trafficking. He took part in the peace negotiations between the rebels and the government, but US officials insist that Farc is continuing with its drug trafficking activities even though it has disbanded as a guerrilla force. Farc won little support in recent general elections, but the peace deal automatically allocates 10 seats in congress to them. The arrested leader was to take one of those seats.
In Malaysia, a snap election has been called for next month. The prime minister, Najib Razak, is under investigation by the US Justice Department for alleged involvement in a multi-billion pound corruption scandal.
In Brazil, former president Luiz Inacio Lula da Silva, who is campaigning as a candidate in the presidential elections due this October, has begun a 12 year prison sentence, having lost his appeal in the supreme court last week against last year’s conviction for money laundering and corruption.
Financial
THE FUTURE’S RENTED: Uber, the app based taxi company, has being through some difficult times recently. Transport for London are threatening to withdraw its licence, the city of York has done so; Paris won’t even give it one (though visitors will be grateful that the Paris cab trade has smartened up considerably recently). Uber have responded by tightening its security procedures for drivers, brought in a new chief executive, and say they have changed their corporate values to reflect that they are a serious business and no longer a start-up. And they are on the acquisition trail; diversification, yet not diversification. Dara Khosrowshahi, their new CEO, says their mission now is to simplify urban transport, effectively, to abolish the private car. So having started to reinvent the taxi/minicab business they are moving onto two wheels. This time they are not innovating but buying an existing operation as a vehicle for major expansion. The business being bought is Jump Bikes which operates fleets of electric rental bikes in San Francisco and Washington (DC) and will soon be opening in New York. Jump is already working with Uber in its two locations, with the bikes available on the Uber app. The price being paid is said to be US$100m, a snip for Uber whose exchange value is over $50bn. Bike sharing has not been the success that many operators had expected – not because of lack of demand but because of high rates of attrition in the stock in trade – with schemes in Seattle, Manchester, and San Francisco abandoned (given the hills of the latter city, that may not be too surprising…). Jump operates electric bikes with technology it says which will make sure that its bikes end in the right place, not the Potomac. Next, says Uber: city bus systems.
NOT DONE SHOPPING YET: Welcome back to the right side of the ledger for one of Britain’s biggest, and oldest, retailers. The Co-op, still a major force in food and clothes retailing in the north and Midlands of the UK, has had a difficult three years whilst it coped with changing patterns of shopping, increasing competition from mainly German owned discount retailers – and the almost fatal problems of its subsidiary, Cooperative Bank. But trading figures for last year suggest that the recent difficulties are over. Although turnover at £9.4bn was flat – reflecting continuing efforts to cut unprofitable lines and outlets – profits were £72m, as against a£132m loss the previous year. That was mainly caused by the Co-op writing off the entire value of its stake in the bank, which has been transferred to its other shareholders, a syndicate of venture capital funds. The Co-op now believes it has a sensible estate of supermarket outlets in good locations, around 2,500 of them, many of which have been modernised in the last few years. It also has the Co-op funeral business, with a thousand or so outlets, long the quiet star of the group, where revenue continues to rise, especially in the forward sale business (prepaid funeral payment plans). A third leg is the Co-op insurance business which is also making good progress as premium income rises. The Co-op has been looking at risk in this business, trying to get the quality of the income improved by a greater level of reinsurance. This pushes net revenues down but should ensure income streams in the future are more reliable. But perhaps the best news of all for the long term future of the group is that membership of the Co-op showed a sharp rise – of 15% – last year, giving the Co-op 4.6 million members. That is a lot of customer loyalty.
