11 April 2019
Lens on the Week
BREXIT DELAY: Mrs May yesterday addressed the other 27 leaders of EU states to request an extension of the time limit for Brexit with a view to avoiding an exit with no agreement on Friday. She seeks a short deferment to 30 June 2019 but it seems likely that the EU will want a longer interval with restrictions on the UK’s influence on decisions meanwhile. Although that would give the UK time to discuss the matter further, that is not necessarily an advantage. The normal rule is that difficult deals are not done until the last possible moment so, unless the matter is settled by a referendum, expect many more months of posturing and position taking.
DIVORCE ON DEMAND: The government, with cross party support, is to bring in a bill changing the grounds required for a divorce so that it is available to either party to a marriage on demand. The need to show five years separation in contested cases and two years separation in consensual divorces will disappear. Instead a declaration by the petitioner that the marriage has irretrievably broken down will suffice. Other grounds for divorce such as adultery or unreasonable behaviour thus become redundant. The change will have little effect on the work of the courts. As now, litigation will be focussed on the division of assets and the custody of children.
BEOWULF: Academics at Harvard have used computer analysis of writing style to demonstrate that the 8th century poem Beowulf had a single author. This, of course, only goes to the question of who wrote it down. There could have been plenty of different contributors before the poem was reduced to writing by a single scribe.
GENDER IDENTITY: Five clinicians who have resigned for the Gender Identity Development Service run by the Tavistock Clinic and the Portman Trust for ethical reasons are reported as being concerned at over dispensing of hormone blockers to pubescent children and irreversible hormone treatment to children over 16. There are also suggestions of “experimenting” with treatments for which there is little evidential support. The Royal College of Psychiatrists is to produce guidelines. The number of people referred for treatment has risen by more than 25 times since 2010.
PEOPLE POWER: In Algeria, President Abdelaziz Bouteflika has stepped down, after two months of popular protests against his twenty years in power. The protests began when he returned to Algeria (he’d been hospitalised in France for the previous two years – he’s 82 years old and in poor health) and announced his intention of standing for a fifth term in the presidential election due this month. Mass demonstrations broke out in protest, prompting the president to announce that he wouldn’t stand for re-election. Then he announced that elections wouldn’t take place next month, after all; instead, an interim government would be appointed and a committee formed to draft a new constitution; only then would a new date for elections be set. Demonstrations continue, however, and having removed the president the protesters now hope to force the rest of his inner circle from power and to replace the old regime in elections. The parliament has appointed the speaker as interim president until elections in three months time, but opposition parties have boycotted parliament because of the speakers ties with Bouteflika, and the protestors are demonstrating against his appointment. Algeria has a very young population, and the younger generation, as well as being numerous, is tired of poverty and hungry for change. But the army inevitably seems to be the deciding factor; it was a general, Ahmed Gaid Salah, who engineered Bouteflika’s departure, and he has expressed support for the demonstrators.
In Sudan, demonstrations which began in the poorer parts of the country against rising food and fuel prices have spread to the capital Khartoum and to the middle classes. Mass demonstrations against President Bashir’s repressive regime have filled the public spaces outside the government complex all week. The demonstrators are calling for a peaceful transfer of power, not a violent rebellion. The country’s security forces are divided; the police and intelligence services have attacked the demonstrators, but the demonstrators have been defended by the army. Thousands of protesters have been arrested throughout the country and reports claim that 21 people (including five soldiers) have been killed by the security services in Khartoum this week. Women have enthusiastically taken to the streets to lead the protests. President Bashir is 73 years old, has been in power for 30 years, and has earned the title the Butcher of Daifur and indictment by the International Criminal Court for atrocities committed in western Sudan.
ISRAEL: It looks like this week’s election will be a dead heat between prime minister Binyamin Netanyahu and his challenger Benny Ganz. Mr Netanyahu would probably have the better chance of forming a government, however, along the lines of his recent coalition of religious and right wing groups with his Likud party. His suggestion (made in the late stages of election campaigning) that Israel should formally annex the West Bank must have been welcomed by right wingers, as was President Trump’s recognition (during Netanyahu’s recent premiership) of Jerusalem as Israel’s capital and of Israel’s possession of the Golan Heights. Benny Ganz is an ex-soldier and army chief of staff who formed a new centrist political party, Blue and White, earlier this year.
IRAN: President Trump has defined the Iran Revolutionary Guard Corps as a terrorist organisation. It’s the first time that an official body of a recognised state has been listed as a terrorist group. It will be illegal under US law for anyone to have any dealings with the Guard. This will make it difficult if not impossible to have commercial or diplomatic relations with Iran, as the Guard controls so much of state business there.
Two weeks of heavy rainfall have created the worst flooding in Iran since the Revolution forty years ago. A state of emergency has been declared in three quarters of the country’s provinces. Rivers and dams have overflowed and roads, bridges and airstrips have been washed away. As many as a hundred people may have died and tens of thousands have been made homeless. Public anger is rising for what is seen as an inadequate response by the regime and for infrastructure faults which have aggravated the crisis.
CASH? NOT LIKELY: The use of cash by the public is in fast decline, says the Bank of England, who notes that it expected plastic and direct transfers to become the major medium of exchange, but not as quickly as is happening. Cash now accounts for less than a third of transactions, and is expected to fall to less than a sixth in the next few years. That means thinner purses and less counting errors, but creates problems for the poorer in our society, who often cannot get cards of any sort because of credit rating problems. Indeed, two million adult Britons do not even have bank accounts, so have no ability to make direct transfers or even use cheques or payment cards, and are still paid in cash, or at least have drawing arrangements to get cash from wages or benefits. But the march of plastic seems remorseless – retailers do not like handling cash and increasingly won’t, and bankers don’t seem to like the folding or tinkling stuff either – and their retreat from high street branches to distant call centres is likely to push cash transactions to ever lower levels.
NEVER PREDICT THE FUTURE: We recently said that oil prices seemed to have stabilised and the general direction was a drift down. We should have known better; earlier this week the price was over US$70 a barrel as trouble flared in Libya. That problem so far is nowhere near the oilfields, but with production from Venezuela falling and Iranian sanctions biting, the threat of disruption to a major supplier such as Libya – and of good quality product – makes the market very nervous.
DEBENHAMS DIRECT: We apologise for lack of coverage of Mike Ashley’s business empire in last week’s edition of Financial Lens on the Week. We have had myriad complaints – well, one, from a reader describing himself as “MA”, from Tyne and Wear. But here is this week’s coverage. Not that MA of Tyneside is going to like it. Mr Ashley’s pursuit of Debenhams finally came to nought, as the board conceded defeat and handed control to Debenhams lenders, who are putting the business into administration. Mr Ashley described the process as “a national scandal” and it does seem remarkable that a business which had an offer from a purchaser, with finance lined up, would choose administration in preference. That offer was of course from none other than Mr Ashley, and it came with a few strings attached – the main one being that Mr A would become chief executive, not surprisingly. But so great was the animosity between the Ashley camp and the board, that the keys were sent to the bank, and down came yet another major, albeit long declining, retail chain. It still may not be over; the administrators will want a deal as soon as possible – and there is an obvious buyer waiting.
SCREENING THEM OUT: All this making you depressed, fancy an escape to your local cinema? Maybe do it whilst you can. The moving picture trade is having a torrid time; most folk prefer home entertainment now, via Netflix or Amazon Prime. That is starting to impact the big cinema chains (though word is many independents are suffering too). Vue, one of the biggest, pulled plans to float last year amid rumours of poor sales, and has now confirmed that it needs to refinance £800m of debt, most early next year, some in 2023. That might just bring them back to the equity market as a cheaper long term source of money, if the sales of seats and popcorn stabilise this year.