Issue 134: 2017 12 21: Lens on the Week

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21 December 2017

Lens on the Week


HAPPY TO LOSE: Last week Dominic Grieve, Conservative MP and ex-attorney general, forced through an amendment to the European Union (Withdrawal) Bill in the teeth of Government opposition.  Now any Brexit deal will have to be approved by statute after a full debate in both Houses.  Does this mean much in procedural terms?  Probably not; either there will be a ground swell behind the deal or, less probably, the consensus will be for a no-deal exit.  A politician from any party who voted against a deal that had public approval would be committing political suicide.

Look at it tactically, however, and the position is more interesting.  Mrs May is earning a grudging respect from the public for moving things forward in the face of great difficulties.  The greater the difficulties, the more the credit, and losing the odd, rather meaningless, vote can only add to her new brand.  Her other audience, of course, is Europe.  It is clear from the way that the Irish border issue was fudged that the EU is anxious to do a deal.  Their question is how good a deal they can extract.  Being hard with the British Government is one thing but the risk that Parliament throws out the eventual deal raises the stakes.  Sending Mr Cameron back from the renegotiation talks empty-handed didn’t work too well as a strategy.  They will not want to go there again.  Signs that any deal could be voted down improve Mrs May’s negotiating hand.

That brings us to a question.  It is said that the whips worked hard on the dissident MPs.  Which way did they whip them?  To suggest that the Government deliberately threw the vote would be to stray into the world of conspiracy theories.  Nonetheless Mrs May may have permitted herself a wry smile when she saw the result.

COMETH THE HOUR: There are moments when justice is hard to come by.  To have been accused of witchcraft in Salem in the seventeenth century would not have been pleasant: nor to have been suspected of communism during the McCarthy era in the US.  Those are eye-catching examples drawn from a long list to which it seems we now have to add being accused of rape in twenty-first century Britain.  The fact that evidence provided late to the defence in recent rape cases led to acquittals, raises the question of what has happened elsewhere.  Has the political pressure to secure convictions in this area led to miscarriages of justice?

The understandable public concern about sexual abuse was bound have an effect on police officers investigating allegations.  It is up to more senior officers to counter this and they will have to decide how to take things forward.  It is all rather a mess, but cometh the hour cometh the man, or in this case cometh the woman, in the well-respected shape of Cressida Dick, Commissioner of the Metropolitan Police.  Ms Dick has a terrific reputation within the force and is certainly impressive if you meet her.  Being recently appointed she has much to do but if she can knock a little sense into everyone on this issue so that people only go to prison if they have had a fair trial, she will have got off to a good start.


POWER IS NOT SEXUALLY TRANSMITTED: Bad news for all Claire Underwoods out there.  Last year, President Clinton’s wife was defeated in the US presidential election; last month, Robert Mugabe’s wife was defeated in the presidential race in Zimbabwe; last week, President Zuma’s ex-wife was defeated in the ANC leadership election in South Africa.  Perhaps this will prevent Melania (or indeed Philip May) from getting unsuitable ideas.  The protesters in Zimbabwe and South Africa have been displaying some remarkably urbane and witty messages on their placards; “Mugabe, You’re Snookered!” was a good one, but the best one was surely “Power Is Not Sexually Transmitted!”.

WHAT!?: In the USA, the man in charge of the government ethics body which polices sexual misconduct on Capital Hill is being sued for assaulting women.  Omar Ashmawy is accused of sexually harassing a bartender, attacking two other women and trying to use his position to influence the police on Valentine’s Day 2015.  He is the head of the Office of Congressional Ethics, which cleared a Republican congressman of abuse in 2015; this week, however, it was revealed that the congressman had paid $84,000 of public money to settle a claim of sexual harassment.

In India, the Minister for Happiness has been accused of directing the murder of a rival politician and has gone on the run.  Lal Singh Arya’s department is supposed to promote “happiness and tolerance” by enabling “people to realise their own potential of inner wellbeing”.  He was due to appear in court this week to answer allegations that he was responsible for the murder of opposition politician Makhanlal Jatav (who was shot dead in April 2009 after defeating Mr Arya in a local assembly election), but he disappeared before he could be arrested.

CATALUÑA / CATALUNYA: Regional elections today (21 December 2017) will decide whether Catalonia will remain part of Spain or become an independent country.  Or will they?  The polls put the separatist parties neck and neck with the anti-independence parties, and it looks like neither block will win a decisive victory.  And neither block is entirely united.  A rift appears to have arisen between those separatist leaders who remained in Spain and were imprisoned and those who fled to Belgium and remained free.  If neither side can form a governing coalition, the uncertainty will continue and the region will have to have yet another election next year.


DO AS I SAY, NOT AS I DO:  There is something compelling about the great and mighty finding themselves deep in the mire.  Many businesses no doubt had an ironic chuckle at the pickle that their bankers got into in the 2008 financial crisis; there is something comical about bankers, who for years had dictated financial behaviours to their customers, finding that they had broken all their own guidelines and had emptied even the petty cash tin because of their lack of prudence and financial controls.  So it has been over the last few weeks as the board of the London Stock Exchange (“LSE”) has fought an embarrassing and increasingly public battle against its own chief executive, Xavier Rolet, and several of its major shareholders.  Mr Rolet has by any measure been a startling successful leader of the business which has become perhaps the leading stock exchange in the world over his 8 year term, with the share price marking the value of the LSE up from £800m to £13bn.  In the end Mr Rolet fell rather badly at a tricky hurdle – trying to merge the LSE with Deutsche Bourse, its Frankfurt counterpart.  This looked like a done deal but then for reasons not entirely clear – Brexit and board memberships are said to be part of it – became undone.  At this point the LSE Board suggested that Mr Rolet might move on, agreeing terms for an orderly departure (and a gagging clause, so Mr Rolet’s views on what then transpired have not been heard).  That did not go down well with some major LSE shareholders, led by Sir Christopher Hohn’s TCI Fund, who thought Mr Rolet should stay, and the chairman, Donald Brydon, should go.   That has become a bitter and ill-tempered battle, ending with a victory for Mr Brydon and the board earlier this week, doing nothing for LSE’s reputation – but reinforcing its advice that change should be consensual, boardroom battles be avoided, and kept privately in the boardroom.

BANKER’S BET PAYS OFF:  It has been a torrid couple of years for Barclays Bank, enduring senior management change, the arrest of its former chief executive on charges relating to financial support during the 2008 crisis, accusations against its new CEO regarding his intervention in a whistle blowing matter; and a faltering financial performance, even in the retail bank where a cost saving exercise led to serious failures of performance. But at last some good news for much criticised chief executive Jes Staley  – the revived investment banking division, into which he has poured resources in the face of much hostility internal and external seems to be paying off.  The business looks as though it will be the most active UK investment banking business in 2017 with a 9% share of the market (JP Morgan is at 8% and Goldman’s at 7%).  Fee earnings are said to be around US$350m which the bank says is giving it its target return on capital employed.   Debt capital markets is the top earning division; Barclays is number one in the market there – but the bank is also building strength in equity capital markets giving it third place this year.  The one failure so far is Mergers and Acquisitions with the bank well down league tables, but some key personnel hirings this year suggest Mr Staley is concentrating on that area next.  Most of this performance is generated in the UK but the bank says it is increasingly focussed on European markets and does not expect Brexit to materially affect its intentions to expand there.  In New York it continues its efforts to build a significant business; that is indeed a highly competitive market but Barclays has hired, it says, good local people, expecting a slow build up over the next few years.



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