Issue 165: 2018 08 02: Lens on the Week

02 August 2018

Lens on the Week

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UK

CORBYN AND THE JEWS:  Mr Corbyn’s relationship with the Jewish community hits a new low as he is forced to apologise for his hosting of an event at the House of Commons on Holocaust Memorial Day 2010.  The main speaker at the event was a survivor from Auschwitz who made comparisons made between Israel’s behaviour in Gaza and the holocaust.  He also accused Elie Wiesel, the Jewish author and Nobel peace prizewinner, of being the “High Priest” of a holocaust religion.

Many Jews will find the description of the meeting disturbing and no doubt the imagery used was offensive.  Still, this is an area in which strong views are held, and participating in the meeting does not make Corbyn a racist.  It would probably have been better if the leader of the opposition had kept his distance from the more radical speakers, but then in 2010 Mr Corbyn did not expect to become leader of the opposition.  Surely this debate, if we have to have it, should focus on whether Mr Corbyn is doing enough to combat racism and political stalking among his activists, not whether his attendance at an event eight years ago is appropriate for a party leader.  Still, the party has not helped matters by threatening to discipline Margaret Hodge for speaking out on antisemitism, so maybe they deserve what they get.

IN THE HUNT: As other ministers take a holiday, the new Foreign Secretary, Jeremy Hunt, scuds from one European capital to the next pointing out the dangers of a no-deal Brexit.  Of course he will be listened to politely and of course no country will break ranks with the Commission.  The aim is to create pressure behind the scenes.  Lobbying EU member states to create pressure is very much part of the negotiating game for both sides and has been going on for some time, although it is hard to be sure as to the level.  Did the Commission encourage Ireland to make much of the border issue, for example?

LOSING THE UMPIRE: The Supreme Court has upheld a ruling by a High Court judge that where family and doctors are in agreement, food and drink can be withheld from those in a permanently vegetative state without the sanction of a court order.  That sounds sensible enough but before jumping for joy it behoves us to ask what the requirement for a court order actually achieved.  Well, it prevented a stitch-up, of course, providing an independent eye to see that greedy relatives had not found a hospital which was not to scrupulous about the issue of certificates.  It is reassuring to know that society is now in a state where such protection is no longer necessary.

International

ELECTIONS: In Cambodia, prime minister Hun Sen claimed 80% of the votes, a landslide victory which will win more than 100 of the parliament’s 125 seats for his CPP party.  Mr Hun is an ex-Khmer Rouge commander who has governed the country for more than 30 years.  He won 45% of the vote in the previous election, five years ago; since then he has suppressed dissent, jailed journalists and dissolved the opposition CNRP party (its leader is in prison and its deputy leader is in exile).  In last week’s election, there were reports of companies putting pressure on employees to vote CPP, of local officials putting pressure on residents to vote CPP, and of people being prosecuted for suggesting a boycott.  The government blocked a number of independent news sites.  The USA, Japan and the EU withdrew their support for the election.

In Pakistan, Imran Khan and his PTI party claimed victory, winning 115 of parliament’s 272 seats.  He is 22 seats short of an outright majority, so will have to form a coalition government.  However, the other two main parties – the PMLN with 64 seats and the PPP with 43 seats – have declared that they are determined to go into opposition rather than take part in government.  The other 50-odd seats were won by a number of miscellaneous parties, each of which would demand a cabinet post in return for helping Mr Khan to form a government, and it’s unlikely that there would be sufficient posts to go round.  Most of the parties other than the PTI accused the army of backing Imran Khan and undermining their own campaigns; there were allegations of coercion and intimidation.  The military has a reputation for interfering in politics; it has launched a number of coups and enjoyed more than three decades of power in the 71 years since Pakistan’s foundation; in contrast, no democratically-elected prime minister has completed a full five year term in office.  Mr Khan’s predecessor, Nawaz Sharif, was overthrown by the army twice in the 1990s, and found himself in conflict with the army throughout his most recent term, which ended last year when he was found guilty of corruption and money-laundering and removed from office.  He is now in prison, but insists that the charges against him were fabricated by the military, and claims that the generals are supporting Khan’s PTI to keep his own party – the PMLN – out of government.

In Zimbabwe, the results of this week’s elections have yet to be published.  Emmerson Mnangagwa, who took over as president and as leader of Zanu-PF when Robert Mugabe was ousted last year, is competing for the presidency against Nelson Chamisa, leader of the opposition MDC party.  Zimbabwe has been a one-party state governed by Zanu-PF for the last three decades; although the voting took place without violence, it’s feared that violence will follow publication of the result: in the event of a Zanu-PF victory, because the opposition will feel cheated of power; or, in the event of a MDC victory, because the entrenched Zanu-PF and its partners in the military will be unwilling to relinquish power.

See comment Staff College Lecture.

Financial

SERGI MARCHIONNE:  We referred last week to Sergio Marchionne, chief executive of FIAT, the car manufacturer, who had resigned aged 66 due to ill health.  Sadly Mr Marchionne died later in the week.  He was one of the most talented and erudite of international business men, an great admirer of Steve Jobs, often dressed, like him, in a black jumper.  Mr Marchionne, who studied philosophy and became an accountant, joined the board of FIAT in 2003 and took the reins as chief executive the following year.  FIAT had lost its way as a car maker with problems of low quality and over manning; the controlling Agnelli family recognised this and, having no available family member suitable to take on the job, gave it to Mr Marchionne.  In spite of the difficulties of the 2008 recession and of car making generally, he transformed the business, now one of the best car makers in the world.  The introduction of the 500 model was a triumph, as was the much derided takeover of the bankrupt Chrysler.  The company is now worth 11 times its value at Mr Marchionne’s appointment .

OUT OF INTU:  As the once mighty Hammerson stumbles, so does its recent but failed bid target, Intu.  Out goes chief executive David Fischel who will be “set free” (his words) as soon as a successor is appointed.  Mr Fischel intended to leave if the Hammerson merger had gone through, but a £500m loss for the first six months of 2018 seems to have confirmed it.  The value of Intu’s retail property portfolio was written down £650m – 6% of value, an alarming indicator as to what is happening to the British retail property sector, especially as the Intu portfolio is regarded amongst peers as one of the best.  Intu is quoted but 25% is owned by its deputy chairman, northern billionaire John Whittaker of Peel Holdings who is said not to get on hugely well with Mr Fischel.

OVER TO: “A company from over here, doing rather well over there” the Hanson strapline used to say. Time to bring it back?  Weir Group, founded as an engineering business in Glasgow in 1871, has stuck close to its engineering roots, making specialist kit for oil, gas, and mining.  Its business is now worldwide but with emphasis on the UK and USA.  Recently it paid US$1bn for the similar US company Esco, and the two businesses saw like for like profits rise by 18% in the last half year, with growth strong on the back of the booming American shale oil and gas industries.  Esco concentrates on mining tools, but that too is booming with specialist machinery for the copper mining industry performing especially strongly on the growth in electrical connectivity to which copper remains key.

BACK FROM:  If anything underlines how the London residential market has fallen away from its peak of a couple of years ago, it is the news this week that Foxton’s, the brash but highly successful quoted estate agents, who are ubiquitous in the smarter parts of the capital, have made their first ever loss since floating in 2013 – their results for the first half of this year showed a loss of £2.5m (against a profit of £3.8m for the same period in 2017).  However, the business has been struggling for a while, with revenues and profits falling, as sales activity shrank.  Although the letting business has counterbalanced that to an extent, it is suffering from severe competition, mainly from small independents who really know their patch – which is how Foxtons began, over 20 years ago

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