21 February 2019
Lens on the Week
LABOUR: Pandora’s box opened? The crack in the dyke? Is the Labour split the beginning of something bigger? Where the gang of seven (now eight, plus three Tories thrown in for good measure) have trod will others follow? It all depends if they can seize the initiative. The original seven each gave his or her reasons for leaving the Labour party. “Leaving the old tribal politics behind” says Chuka Umunna, the heavyweight, and potentially the leader of the group. Others were more vitriolic: “unfit for government”, “riddled with antisemitism”, “hijacked by the machine politics of the hard left”. The sense of hurt and betrayal is inescapable, but one thing is common to them all and to the others who have joined them. They are Remainers, for the rerunning of the referendum, something which is very unlikely to happen. If that is not on offer, will they support May’s deal rather than watch the country face a hard Brexit? Presumably.
Their positioning makes significant further defections from the Tories unlikely. The obvious breakaways are the Moggites and the ERG, hardly natural members of the new group. A splinter from the Tories to the right is certainly a possibility but there is no way of combining the two moves.
But step back from Brexit for a moment and look at the more general tide of British politics. There is a general feeling that the revolution begun by Mrs Thatcher in 1979 has run its course and that the time has come for something different. This lay behind the Labour surge in 2017 as large parts of the electorate, and particularly the young, seized upon Corbyn as the champion of change. Gradually that dream has died but the feelings which impelled it are still there. Can Umunna harness them? “Cometh the hour, cometh the man” says an optimistic proverb. The hour is come but is Umunna “the man”? We shall see.
OUR PROBLEM: Mr Trump certainly thinks it is. What to do with the captured ISIS fighters who came from the UK and other European countries which would much rather not see them back? The Kurds don’t want them. The US doesn’t want them and is not particularly impressed by the fact that we have revoked their nationalities and torn up their passports. If we do not take them back they will ultimately be freed and no doubt find their way back here. France is the only European country to agree to take its citizens back. Why should we not be responsible for the detention and re-education of ours?
NOT ENOUGH WHINGING: The Care Quality Commission has said that people often do not raise concerns about their care by the NHS because they do not want to be seen as troublemakers or are worried that complaints might make matters worse. Well, you might worry about that, mightn’t you, knowing that those complained about are to give you a painful injection next week? Apparently however the fear is misplaced with two thirds of complaints being resolved satisfactorily. That is a great credit to our doctors or nurses. Still, if it was me I think I would make the complaint after that injection rather than before it.
TALK TALK: At talks in Warsaw, hosted by Poland and the USA, leaders from Arab countries and Israel held meetings together for the first time since the 1991 peace conference in Madrid. The prime minister of Israel Binyamin Netanyahu attended, as did the foreign minister of Saudi Arabia and high-ranking representatives of nine other Arab states and more than fifty other countries. It was called “Promoting a Future of Peace and Security in the Middle East”, but nicknamed “the anti-Iran conference”. Gulf States might not officially recognise Israel, but they all have a common enemy in Iran and the conference was all about how to contain Iran’s growing influence in the region. The list of those who did not attend was as significant as those that did: Lebanon and Qatar have ties to Iran; Russia is allied to Assad and his ally Iran in Syria; Palestine is increasingly seen as irrelevant to peace when compared to the Iranian threat; Turkey, suffering from US sanctions, is leaning towards Russia; and Europe has clashed with the US over Trump’s repudiation of the anti-nuclear deal with Iran – it’s hoping to keep the deal alive and to continue trading with Iran. In spite of the European venue, the EU’s foreign affairs representative Federica Mogherini didn’t attend. France and Germany sent only junior ministers and civil servants. The UK foreign secretary Jeremy Hunt attended but left early. The growing rift between the Atlantic allies of Europe and the USA was clearly evident.
Meanwhile, Russia – which had turned down an invitation to Warsaw – hosted President Rouhani of Iran and President Erdogan of Turkey at a rival conference in the Black Sea resort of Sochi. All three countries are suffering under US sanctions, and all three are the powers behind the various factions in the Syrian civil war. The imminent withdrawal of US troops from Syria, where they have been helping Kurdish-led forces to defeat Isis, presents these states with new challenges. Turkey is worried about the presence of an embryonic Kurdish state along its border, inside northern Syria (Turkey’s security forces are fighting a Kurdish insurgency inside Turkey); Erdogan and Trump have discussed a plan for a safe zone on the Syrian side of the border to be patrolled by Turkish troops, enabling them to prevent Kurdish militants passing between Syria and Turkey. The Assad regime in Syria obviously takes a dim view of having foreign troops on its soil, and his allies Putin and Iran are refusing to sanction the idea.
Later in the week, Germany hosted an international security conference in Munich. The rift between Europe and the USA became even more evident, with Chancellor Angela Merkel defending the anti-nuclear deal with Iran and criticising the US decision to withdraw troops from Syria. US vice-president Mike Pence criticised Europe’s stand on the deal and accused it of undermining other countries’ effort to rein in Iran. Iran’s foreign minister Mohammad Javid Zarif accused the USA of being irresponsible in its opposition to Iran and warned of the growing danger of war with Israel.
GOING WEST: More evidence of the troubles affecting the car industry. This time it is a Honda, who have let it be known (no official announcement yet), that they will close their European manufacturing plant at Swindon in two or three years time (though they intend to keep their European distribution headquarters there). This is a major shock to the automotive industry, though perhaps it should not be. Honda have been at Swindon for over 20 years with a modern plant into they have continued to invest, and a notably skilled and well trained workforce. But… But, like Nissan whose UK struggles we have recently covered, Honda failed to spot the rapid change among car buyers – enforced it has to be said by western government legislation – to move to electric propulsion and away from diesel engines. Sales of cars are falling and manufacturers are having to invest heavily and rapidly into new engine technology. With the wage and social costs of building in new plants in Europe, and the crunch on costs, it does not make economic sense to build new plants in the west – especially as the main growth markets for automobiles are in the Far East. The way in which Honda have drifted their news into the market does though allow perhaps for governmental reflection and possibly investment incentives to do something new here.
NO MEAT IN IT: It’s been a bad opening to the year for vegans; abused by bank workers this week, vegan “cheese” the target of the dairy cheese industry last week – they said vegan cheese is nothing of the sort and should find another name; and now the hospitality industry say January was a bad month for sales – and blame veganism. The industry says vegan January put people off going out – and they spent less on non-meat dishes when they did. But as Christmas sales were up 4% on last year, maybe we just all over spent.
HEAVY PRUNING: The troubled garden centre business Wyevale, owned by the venture capital fund Terra Firma, has rather less firma now – it has sold a third of its sites on a one by one basis to avoid defaulting on its bank covenants, leaving it with 99 after raising £183m by selling about fifty.
PRUDENT SHOPPER: Mike Ashley’s recent spending spree seems to have paused. The boss of Sports Direct looked a few weeks ago as though there was not a failing retail chain on the high street that would not attract his cheque book. But for all the talk, Mr Ashley knows the value of a pound sterling. He continues to stalk Debenhams where he owns nearly 30 % of the shares. No bid has been forthcoming yet; it is said he would prefer an agreed deal. But his strongly rumoured bid for HMV was trumped by the Canadian Doug Putman, of Sunrise Records, an old fashioned bricks and mortar retailer who still seems to be able to make money out of selling cd’s and dvd’s. The Ashley team was then rumoured to be consoling itself with a large cream cake by buying Patisserie Valerie but said that the financial information available was not very forthcoming – hardly a surprise to the exiting and furious shareholders. As it was, the hands that grabbed most of the éclair were those of Causeway Capital Partners, an Irish venture capital fund, with a smaller slice going to AF Blakemore, who own Spar, the grocery chain. So all Mr Ashley has garnered so far this year is Sofa.Com, somewhere to sit whilst he contemplates his next moves.