30 May 2019
Lens on the Week
UK
TORY LEADERSHIP RACE: Hats have gone into the ring from Boris Johnson, Dominic Raab, Michael Gove, Sajid Javid, Jeremy Hunt, Andrea Leadsom, Rory Stewart, Matt Hancock, Esther McVey and Kit Malthouse. There may be more to come but probably, unless Mad Mogg decides to meddle, nobody of significance. According to The Times Ladbrokes put Johnson ahead at 6/4, followed by Gove at 4/1, Raab at 5/1 and Leadsom (surely not) at 8/1. Despite some initial support for leaving with no deal, the main candidates must realise that that is unlikely to happen (see comment article). The dilemma then is whether to stick with an illusory “no deal” line in the hope that that will woo the Conservative members or to be more frank about the prospects. The latter approach is likely to appeal to Gove who has been a steady supporter of Mrs May’s position. What, though, will Johnson and Raab say? A promise to change the Withdrawal Agreement itself or to leave without a deal is likely to unravel in the course of television interviews. Yet to admit that May’s deal needs to go through would be a climbdown. Also, senile and self-centred as they are rumoured to be, there is just a possibility that the Conservative members are not entirely stupid.
MALAYSIAN WASTE: The fact that Malaysia is to return non-recyclable plastic waste to the UK, the US, Canada, Australia, France and Saudi Arabia builds on the previous refusal to accept plastic waste by China. It is clearly a good thing. The countries exporting the waste are all highly developed and at the cutting edge of technology, and it is up to them to find ways of dealing with it. Of course it will be expensive but it will also lead to the development of new techniques for tackling a global problem. If environmental problems are to be solved, they must be faced head-on and not shifted to less developed countries.
LABOUR: In a quite extraordinary tactical blunder the Labour party has expelled Alastair Campbell, previously spin doctor to Tony Blair, for voting Liberal Democrat in the European Elections. Not only has that resulted in a number of other senior Labour figures admitting to have done the same but it has focused attention on people who have not been expelled, including Holocaust deniers and advocates of violence. The truth is, no doubt, that the leaders of the Labour Party hate Campbell because of his Blairite antecedents and thought they had found a cheap way of getting rid of him. They were wrong about that.
FALSE SPIN: An investigation by HuffPost UK, the Bureau of Investigative Journalism and others has revealed that Kensington and Chelsea Council made £129 million from property development in the years running up to the Grenfell Tower disaster and had £37 million in the bank from that source at the time when decisions are being made. So what? Presumably the Council had lots of other money as well – cash from ratepayers, the Community Charge, money destined for education, for the care of the elderly, for the upkeep of pavements. Surely no one suggests that because it is a rich Council it should spend other than efficiently on the cladding of its buildings or on the provision of services? The tragedy is that it or its contractors authorised use of a form of cladding which was dangerous. The Council can be criticised for that. Whether or not it had other assets is hardly the point.
NOT SO SMART: Highways England says that new smart motorways will have emergency refuge areas every mile instead of 1.5 miles. That is a sop to public concern at the loss of hard shoulders. Still, it won’t help much if you break down between the refuge areas. Just have to hope that the heavy lorry behind spots the red cross on the overhead signs and that the computer is prompt in putting it up there. Otherwise kersplat!
International
EU ELECTIONS: Elections for the EU parliament saw centre parties losing ground across the continent. Labour and Tories suffered in the UK, Marine le Pen beat President Macron by a whisker in France (the Republicans and Socialists disappeared), Salvini’s the League continued to build in Italy, and the Social Democrats did badly in Germany. The overall picture is one of polarisation and fragmentation. The rise of populist and nationalist parties, and of previously marginal parties such as the Greens, is reflected in the new composition of the parliament; the centre right and centre left blocks have shrunk, and neither can command a majority.
This is going to make the selection of the replacements for Jean-Claude Juncker and Donald Tusk even more interesting when the positions of European Commission President and European Council President become vacant later this year. European leaders are already at loggerheads over this, and are sure to be at loggerheads with the parliament when selection is underway (they are unlikely to tolerate the parliament’s spitzenkandidaten process this time) and EU rules are astonishingly vague about how the whole thing should be done.
SYRIA: The regime assault on Idlib province, where the last rebel forces are corralled, continues in spite of the area being subject to a ceasefire agreed by Russia and Iran (on behalf of the regime) and by Turkey (on behalf of the rebels). The area is under control of the militant jihadist group HTS (Hayat Tahrir al-Sham), the last rebel group to be holding out against Assad, but the regime’s tactics of hitting zones behind the front lines with air-strikes, shells and barrel bombs are resulting in heavy civilian casualties. Sixteen civilians (including six children) were killed on Monday; the Syrian Observatory for Human Rights has reported that 305 civilians (including 69 children) have been killed in the past month. Fighting on the front line is fierce – the key town of Kafra Naboudeh has changed hands at least three times since the assault began five weeks ago. It’s estimated that 400 regime soldiers and 300 rebel soldiers have been killed.
INDIA: The world’s biggest ever elections in the world’s biggest democracy has resulted in a landslide victory for Prime Minister Narendra Modi and his governing BJP party. Opposition hopes that the government’s failure to deliver on job creation would make it vulnerable foundered against the president’s charisma. Modi’s confident and modernising persona overcame the more divisive and unsavoury aspects of his Hindu nationalist party to win an overwhelming 353 seats in the 545-seat parliament, up from 336 in the 2014 election. The leader of the opposition Congress party, Rahul Gandhi, lost his seat; he had held it for fifteen years, and with its loss the Gandhi dynasty seems set to exit from the stage it has dominated for even longer.
Financial
WORLD CARS: Last week it was Peugeot, Vauxhall, Land Rover and Jaguar that were looking at merging – they already are two groups of course – and this week comes another possible combination, Chrysler/Fiat are talking to Renault about taking mutual shareholdings, with a view in due course to a complete merger. This one could be complicated; Renault chief executive Carl Ghosn is also CEO of Japan’s Nissan group and the two giant car companies have many operations of mutual interest. Or at least he was Nissan chief until recently charged with fraud. He was arrested, released on bail, rearrested and again bailed. None of this has gone down well in France – Ghosn is a French citizen and Renault are concerned that there is a political and business dimension to their CEO’s arrest. So it would suit them to get free of their Far Eastern encounter and tie up with the largely Italian controlled Fiat/Chrysler group. This looks like a merger that will happen. Which does not solve the problem of declining sales and the need for faster advances in technology – and indeed in vehicle ownership, as we are less inclined to own cars, but hire them short or long term as needed The scale of the combined group should give it clout in financial markets.
BLOWN AWAY: They may be some of the ugliest constructions ever to disfigure our green and pleasant land, but at least the next generation should be out of sight and no burden to the tax payer. Wind turbines seem to be firmly moving off-shore – better late than never – but quite apart from the contentious planning aspects on land, they are much more efficient when situated well out at sea, and marginally less damaging to bird life. So efficient is turbine technology now – both in the construction and in the maintenance thereof – that the next generation may not require any public subsidy but will be profitable entirely on their commercial merits. Seven new projects go up for grabs this week, a process which includes the granting of consent and also a subsidy bid by way of a megawatt additional charge for their higher costs. But on present and forecast costs it looks as though some of the bidder/developers will require minimal or even no subsidies, which will please the government.
NORWEGIAN ETHICS: Norway is one of the largest long-term investors in the world, on a scale akin to the Arab oil producers, and for the same reasons: a huge surplus of oil revenue, in Norway’s case from offshore wells. That revenue is mostly, around 95% in a typical year, invested in Statoil (5% goes to annual government spending) from whence the money flows into investment funds and pension funds, all safeguarding Norwegian comforts when the oil runs out. The largest is KLP, the state workers pension fund – and that is a big fund, given the size of Norway’s public sector. It has just announced a tightening up of its ethical investment strategies. No more investing in alcohol production or distribution, no investments in gambling or betting, or in pornography (it says it never has). It has already divested from cannabis production, so it seems as though the criteria is not to have naughty fun. But just to prove it isn’t, they also pulled out of investments in coal mining last month. At one time ethical investment seemed to produce stronger returns, but given that so many investors have pulled out, low-ethical prices have fallen and now may give extra good returns. Let’s hope the pensioners don’t suffer both low fun lives and low return investments.
