06 September 2018
Lens on the Week
UK
SALISBURY POISONINGS: The tale of the poisoning of Yulia and Sergei Skripal begins to gather flesh with the CPS releasing the names of the would-be murderers. Not the real names, of course, the would-be assassins seem to have been Russian agents working under aliases, but this deficiency is compensated by CCTV photographs. At last we have real people accused even if Russian law does not allow them to be extradited. Presumably they will be tried in their absence.
This is certainly a step forward in that it stills the doubts which many of us had as to whether the GRU was involved at all, but there remain lots of unanswered questions. Particularly, “why?” Because of the nature of the Secret Service, we will probably never know the answer to that but hopefully in a large, modern building on the edge of the Thames, somebody has a very good idea.
GOVERNOR: Sir Mark Carney is to stay on past June to help the country adjust to Brexit. Whatever his place in the debate, and we understand him to be a Remainer, that seems to make sense. Experience counts for a lot in financial management as it does in most things, and it can only be a good thing that the man at the helm has an instinctive feel for which levers to pull. Opponents bang on about the process, but here it is the result which counts and in any case the Mandy Rice-Davies rule applies.
STOP AND SEARCH: It is reported in The Times that the new Home Secretary, Sajiv Javid, is proposing to extend stop and search powers and that there will be a public consultation on what constitute reasonable grounds for a search. Asset, drones and lasers which could disrupt aircraft are all targeted. This in effect reverses Mrs May’s decision as Home Secretary to cut stop and search rates by 28% and The Times rather hysterically refers to it as Mr Javid’s “latest challenge to Teresa May and her legacy as Home Secretary.” In fact it is rather simpler than that. Cutting stop and search was a liberal reform which turned out to have unexpectedly serious consequences. As Keynes said “When the facts change, I change my mind”. Governments have to do the same.
ANTI-SEMITISM: The wagon moves on with a motion of no-confidence in its sitting MP, Joan Ryan, being tabled by elements of the Enfield North Labour Party. If deselected she will presumably join Frank Field on the cross benches.
BREXIT: Much has been said on Brexit but as little of it is particularly illuminating, we will leave it at that.
International
GERMANY: Polls suggest that the far-right Alternative For Germany is now the second most popular political party in the country. It registered 17% support, overtaking the socialist SPD with 16%. Chancellor Merkel’s conservative CDU registered 28.5%.
The polls were taken in the aftermath of the anti-immigration riots in Chemnitz, Saxony. The AfD supported the extreme-right demonstrations which were triggered by reports that a German carpenter had been murdered there by Middle Eastern immigrants. Thousands of neo-Nazis gathered from across Germany to march through the city. Many of them chased suspected immigrants through the streets and gave Nazi salutes. An anti-racism concert was attended by 65,000 people in Chemnitz on Monday evening; they were condemned as “disgusting” by the AfD’s deputy parliamentary group leader Beatrix von Storch. The party’s youth division, “Young Alternative”, is to be monitored as an extremist group by security services in two German states.
Two suspects have been charged over the death in Chemnitz and an arrest warrant has been issued for a third. It is claimed that the information that the suspects were from Iraq and Syria was leaked by the police.
SYRIA: Russian aircraft reportedly launched 22 airstrikes against the town of Jisr al-Shughour in the rebel-held Idlib province. The attacks are thought to herald the beginning of the final act of the war – a regime campaign to retake the province which is the last rebel enclave in the country.
President Trump tweeted against any such attack. Turkey supports the rebels and has argued for more time to identify extremists and jihadists among the rebels before the campaign against Idlib is launched. The province is supposed to be a non-escallation zone in which moderate rebels should not be attacked. The Assad regime, backed by Russia, Iran and Iranian-backed Shia militias such as Hezbollah, is unlikely to be concerned with such distinctions. A summit in Tehran between the leaders of Iran, Russia and Turkey is planned for this Friday.
Explosions at the Mezzeh airbase in Damascus are thought to have been caused by an Israeli airstrike. The airbase is the headquarters of the Syrian Airforce intelligence service and a centre for Iran’s Qods Force in Syria. Other Iranian military facilities, near Hama city, were also apparently hit by Israeli airstrikes a few days later. There were claims this week that Iran is building a military base and a missile factory in north eastern Syria within an area covered by Russian S-400 aerial defence system, which would shelter them from Israeli airstrikes.
SAUDI ARABIA: Within months of women being allowed to drive, the first car-theft by a woman has been caught on camera. Or has it? A video from a security camera in a car-park has been posted online: it shows a man parking a car and walking off, apparently having forgotten to lock the car behind him; a figure wearing an abaya and a baseball cap then gets out of a vehicle parked nearby and gets into the first vehicle and drives off… A warning about leaving cars unlocked, or an intrusive glimpse into the furtive methods necessary for some adults to meet in private amidst the country’s strict laws and conservative society?
Financial
ON YER BIKE: And in yer car… Halfords is one of the few retailers who have had a good summer, in both their bicycle and car parts businesses. The 20 weeks up to mid-August saw sales up nearly 3%. The best performance was in car parts, but most of the company seems to be doing well, including (purists please look away now) electric bikes – battery-assisted bikes are becoming a rapid growth area, especially for those biking to work. These are the first results under the watch of new chief executive Graham Stapleton who has pledged much more emphasis on services in Halfords stores, which are mainly out of town. That means the staff in the shop will help you fit your car part or adjust your bike – for a modest charge of course. That seems to be pulling more customers through the doors. Of course, whilst waiting for the new battery to be fitted or the bike chain to be tightened, they may wander round and buy a few other goodies as well. This was an early boost for Stapleton. When he announced on his arrival a more service-based orientation – and the investment needed to pay for it – the shares dropped almost 10%. They were back up almost that amount yesterday on this early evidence that the strategy is working.
NEW BEGINNINGS: Advertising agency giant WPP is attempting to draw a line under the sudden and controversial departure of founder and long-time leader Sir Martin Sorrell in April this year. It announced the appointment in Sir Martin’s stead of Mark Read, a long term WPP staffer who took over on an interim basis when Sorrell left. His appointment is now confirmed – word is that he greatly impressed with his calm and polished handling of the crisis and the recovery. The latter included the winning of a new number of contracts, including Hilton, Mars, and Adidas. The board also likes his thoughtful approach to the many challenges facing the advertising industry generally – especially from social media and declining print advertising. Mr Read announced the quarter year results to end of June which showed a slightly mixed bag – profits were up, but adjusting for one-offs and special events they were down around 7%. Mr Read was cautiously bullish in his statement, saying that he expects growth in contracts and in revenue in the second half of the year.
MOVING UP: Wonga, the so-called payday lender struggling to remain in business, may have had its day, but new lending models are still working well for business. Peer-to-peer lenders pass the money of private and small retail “lenders” – easier to understand as depositors – using management expertise to bulk up the incoming cash and invest across a range of borrowers. They are not cheap – there is a lot of analysis and administration involved, but for a start-up business the loans can be invaluable; and the lender/depositors get a far higher rate of return than they would with an old fashioned bank deposit (for a lot more risk of course). Not all peer-to-peer lenders have been trouble free in their lendings but overall the sector has done well and filled a gap traditionally the preserve of the local clearing bank manager. Now Funding Circle, one of the early entrants to the sector, and regarded as one of the best run, is going to go public, to raise £300m to further grow its business both in and outside the UK. Funding Circle is loss making at the moment – its says the UK business is profitable, the losses come from its continuing push for expansion.
