14 February 2019
Lens on the Week
UK
BREXIT:
The position becomes ever more complicated with:
- Olly Robbins, the UK’s chief negotiator being overheard predicting that the EU will agree to defer Brexit to give more time;
- the Prime Minister insisting that we will leave on 29 March and lifting the rule that international treaties cannot take effect until 21 days after they are approved, presumably in case things run to the wire. She is to come back to the Commons on 26 February with proposed changes to the backstop;
- Labour arguing that the UK should remain in the single market, presumably forfeiting its right to make independent trade deals. The Government resists that but are prepared to make certain concessions on workers’ rights to try to secure Labour support. Mr Starmer, who has had discussions with Government ministers, believes that if no deal is approved on the 26th Parliament should take control (whatever that may mean); and
- the SNP is anxious to rule out the possibility of the vote being postponed to after the Ides of March.
If you find that confusing, try reading something simple to clear your mind. What about that copy of “A Brief History of Time” still sitting on the bookshelf?
TORY LEAD: The latest poll by You Gov suggests that at a General Election the Tories would achieve 321 out of a total of 650 seats. That is just enough for a working majority after taking into account the fact that Sinn Fein do not take up their seats. Still, the margin is certainly not large enough to encourage Mrs May to call an election (under the Fixed Term Parliaments Act that requires a 2/3rds majority but Labour could hardly oppose it).
The poll also indicates that Labour would lose a dozen or so seats and trail the Tories by 5%. Their support seems to be foundering on their equivocal attitude to Brexit with the leadership in favour and the majority of their MPs on the Remain side. The drop in support must be seen as encouraging by any MPs contemplating a break away. Bets on the ides of February, anyone?
LABOUR ANTISEMITISM: 700 complaints of anti Semitism have been made in the last ten months with 12 expulsions from the party. Dame Margaret Hodge who has herself lodged 200 complaints since October considers the level of expulsions unbelievably low. A motion of no confidence against Luciana Berger, the Labour MP for Liverpool Wavertree, has been withdrawn after one of its sponsors, Kenneth Campbell, referred to her as a disruptive Zionist on facebook. What is going on? Has the party been infiltrated by Nazis? No, of course it hasn’t. True, the party has its fair share of nutters but the problem is that the Pro-Palestinian stance of the left has resulted in anti Jewish smearing becoming an “acceptable” weapon in their conduct of politics. That is not a comfortable place to be, particularly with the present emphasis on rooting out racism.
GRAYLING IN SALT WATER: The grayling is a freshwater fish so perhaps it is no surprise that the Transport Secretary of that name should have come unstuck over seagoing ferries. Anyway the failed attempt to have the extra ferries to the continent which will be needed if there is a no deal Brexit run by Seaborne Freight, a company which famously “had no ships”, has left him politically exposed, with calls for his resignation coming from all round the political spectrum. The Government has said that it has confidence in him, so often the precursor of a departure.
International
SYRIA: The final assault on Baghuz, the last pocket of territory held by Isis, has begun. It’s estimated that up to six hundred Isis fighters (mostly foreigners) remain to fight it out against the Western-backed and Kurdish-led SDF (Syrian Democratic Forces). The attack on Baghuz was delayed for two weeks while negotiations aimed at freeing civilians and Isis-held captives took place. The negotiations broke down, however, so the ultimate fate of the captives and civilians remains uncertain, as does that of any Isis fighters and their families who survive the battle. The defeat of Isis elsewhere in Syria and Iraq has filled camps with hundreds if not thousands of captives – foreign fighters, their wives and children – whose fate remains to be decided; their countries of origin are understandably reluctant to take them back.
VENEZUELA: A colonel in the army has renounced Maduro’s regime, saying that “Ninety percent of us in the armed forces are really unhappy. We are being used to keep them in power”. He urged soldiers to help get aid into Venezuela from where it has been stockpiled in neighbouring countries. An air force general (the military attache to Washington) and the ambassador to Baghdad have already defected. The rank and file of the military are believed to be suffering deprivation alongside the civilians, but so far the high command remains loyal to Maduro. The judges of the Supreme Court, appointed by Maduro, have ordered the attorney-general to begin treason investigations against anyone who accepts appointments from Juan Guaidó, who began this week to choose ambassadors. However, China has begun to hold talks with representatives of Mr Guaidó in Washington about Venezuela’s $20 billion debt to China (China has lent $60 billion to Venezuela in the last ten years, in return for oil). Hundreds of thousands of demonstrators rallied in support of Mr Guaido across the country. He announced that the stockpiled international aid will be coming into the country on February 23. This week Maduro launched a global campaign to promote Venezuela as a tourist destination.
INDIA: India’s railways minister posted footage of the new Vande Bharat Express’s final tests on Facebook and Twitter. The footage of the speeding express train was retweeted by officials and broadcast on the news by the ruling party’s TV station. However, a trainspotter claims that the footage was a speeded-up copy of a video he put online last December. Two years ago the same minister posted a picture of a brightly-lit road to illustrate the government’s efforts to improve street-lighting; the picture had actually been taken in Russia. And a picture he used to illustrate the government’s protection of India’s coal-mining industry was actually taken from an Amnesty International report criticising the government’s coal-mining policies.
Financial
MORE MOTOR PROBLEMS: The car industry is increasingly in trouble – at least among those car makers who make petrol and diesel cars. Although the number of electrically powered cars sold continues to increase rapidly, it in no way compensates for the slump in vehicles with traditional propulsion. Latest automaker to reveal the scale of the problems is Nissan. It announced two weeks ago that it would not be building the new X-Trail at its Sunderland factory, but, due to much reduced sales forecasts, only in Japan. Although this became a short-term Brexit football, it was, as Nissan made clear, a response to rapidly falling demand in the competitive SUV market. The latest financials, announced last Tuesday, covering nine months of the financial year, showed sales in the US down 10% and in Europe by 16% – even though there was growth in the home market and elsewhere, Nissan’s formerly strong position in western markets is the problem. Profit forecasts for the year were reduced accordingly, by 20%. Although Nissan is now investing in both electric and hydrogen propulsion technologies, it is going to struggle to reverse this trend. With Jaguar LandRover also reducing sales forecasts and announcing a £4bn loss for the year, together with 5,000 employees laid off, this will be a grim year for the car industry.
ROAST IN A HOT OVEN: Disaster at Ocado. The online grocery delivery business has invested heavily in building super-hub warehouses over the last few years – massive technologically advanced storage and sorting facilities at key points amongst its strongest consumer markets. The dangers of scale were brought home last weekend when the warehouse at Andover, its main centre for west of London and the south coast, caught fire. In spite of internal fire breaks, the whole building was destroyed, taking out at a stroke 10% of Ocado’s capacity in the UK. Not surprisingly, the share price tanked, down nearly 10% on the day. Although Ocado is still pondering how to cover the big hole in its distribution network, the stock market was much quicker to recover, and the share price is back to where it was. Affectionate support for a bruised company? Of course not. The damage makes a takeover of the business much more likely. Ocado has always struggled to make a profit, but has raised enough capital to make itself a leader in the twin technologies of retail online ordering and of storing, sorting, and loading (those super-hubs) and that knowledge, and the chain it has built (less Andover) could be very valuable to a supermarket chain anxious to take a big leap forward in online groceries. Just check the fire sprinklers before you invest…
FASHIONABLE DISTRACTION: Shaftesbury, the property company which owns Carnaby Street, as a London hub for fashion shopping, continues to fight its largest shareholder, Sammy Tak Lee, a Hongkong property billionaire. Mr Lee owns large property empires in Tokyo, Hong Kong, and Switzerland – but also in London, where he owns the large Langham estate, that area north of Oxford Street and east of Great Portland Street. He has been building up a stake in Shaftesbury, now 26%, for years. It owns the real estate south of the Langham estate and Mr Lee would like to run the two interests together. Equally, Shaftesbury would like to get rid of him and has, says Mr Lee, been trying by issuing new shares, to dilute the Lee holding below 25%, so he cannot block a company reorganisation. Shaftesbury denies this, but the struggle looks to be headed for the courts as the Lee interests blocked various motions at the Shaftesbury AGM last week.
