13 June 2019
Lens on the Week
UK
RUNNERS AND RIDERS: At the starting gate for the Conservative leadership stakes yesterday morning were:
Michael Gove, Secretary of State for the Environment, who would be prepared to postpone Brexit in an effort to improve the terms of the backstop. He is a supporter of a free trade agreement and would rule out a further referendum. In the end, if push came to shove, he would accept ‘no deal’.
Matt Hancock, Secretary of State for Health, would not contemplate ‘no deal’ so if we could not get a satisfactory deal we would not leave at all.
Mark Harper, formerly Chief Whip, is keen for a deal but would contemplate leaving without one.
Jeremy Hunt, Foreign Secretary and previously Secretary of State for Health, takes a similar position.
Boris Johnson, one-time Foreign Secretary, would take the UK out of the EU on 31 October even if there was no deal. His hope is that the Irish backstop can be removed from the Withdrawal Agreement and he threatens to withhold the £39 billion the UK is due to pay on leaving.
Andrea Leadsom, former leader of the House, hopes to renegotiate but regards leaving on 31st October as a red line.
Esther McVey, formerly at work and pensions, seems to actively favour a ‘no deal’ exit but could be persuaded if the EU makes a better offer.
Dominic Raab, the Brexit Secretary who then voted against the agreement his department had negotiated, would, in the absence of a satisfactory deal on the backstop, be prepared to force ‘no deal’ through by arranging for Parliament to be prorogued to prevent it interfering.
Rory Stewart, International Development, backs the Withdrawal Agreement and proposes to debate it in citizen assemblies. He is strongly against leaving without a deal.
Sajid Javid, Home Secretary, is committed to trying to make the Withdrawal Agreement acceptable but is prepared to contemplate leaving without a deal.
The striking thing about the candidates is that once you eliminate the odder suggestions such as proroguing Parliament and holding citizens assemblies, they are all broadly in favour of renegotiation and, failing that, leaving without a deal. There are differences of emphasis of course and nobody suggests a referendum. That could be because they do not think it a good idea or it could be because they do not think that it will appeal to the party which they aspire to lead.
NO DEAL BLOCKER FAILS: An attempt by opposition parties to give MPs the power to block a ‘no deal’ Brexit was defeated in the House of Commons. 10 Conservative members rebelled by voting for the motion. Eight Labour members rebelled by voting against it. Had the motion passed it would clearly have undermined any threats by a new Prime Minister to leave without a deal.
CARBON ZERO: The Government is proposing to amend the Climate Change Act to set a carbon zero target for 2050. This has been widely welcomed by environmentalists although the Chancellor of the Exchequer is known to be concerned about how it is to be paid for. The hope is that other countries will follow our example.
PRISON: A report by the Ministry of Justice says that Muslim prisoners are intimidating their fellows and forcing them to follow Islamic rules through beatings and threats. About 15% of the prison population is Muslim.
OXFAM: An 18 month enquiry by the Charity Commission into sexual abuse and bullying by senior aid workers from Oxfam identified a culture of misconduct and also attempts to conceal the gravity of what had occurred in Haiti. Failure to properly investigate allegations had been motivated by a desire to protect the charity’s reputation and its relationship with donors. Difid was considering the extent to which the government should continue to fund the charity and has said that it will receive no public funds until it meets the high standard the government expects of its partners.
International
HONG KONG: Mass protests filled the streets of Hong Kong as the territory’s chief executive Carrie Lam introduced a new bill to parliament which would make the extradition of suspects to mainland China easier.
The new law is supposed to cover suspected criminals such as drug traffickers, money launderers and terrorists, but many in Hong Kong fear and suspect that it is an initiative backed by Beijing to be used against political activists in the expectation that dissent would wither in Hong King once opposition figures started to disappear into detention on the mainland.
The Legislative Council (Hong Kong’s parliament) will debate the law over the next week. Mass demonstrations, strikes and blockades will continue in protest against the measure which is seen as an attack on the “one country, two systems” agreement. Many demonstrators regard their protest as a last stand for democracy.
PRESS FREEDOM: Russian investigative journalist Ivan Golunov was arrested last week and charged with drug dealing. The police claimed to have found methadrine in his backpack and cocaine in his flat. Mr Golunov claimed that the drugs had been planted and that he had been beaten by the police, and he suspected that the arrest was linked to recent anti-corruption investigations for which he had already been threatened. The arrest and charges (which could lead to twenty years in jail) triggered widespread and high-profile protests within Russia and around the world, and this week the charges were dropped because of lack of evidence. The police admitted that photos of the drugs in his flat had in fact been taken elsewhere. It’s thought that the authorities backed down in the face of public outrage to pre-empt further and bigger protests planned for a bank holiday this week and to avoid embarrassment to President Putin whose annual national phone-in is due to take place next week.
In Australia, three police operations last week raised fears that press freedom is facing a rising threat from the authorities. Police raided the headquarters of the national broadcaster ABC in an attempt to seize thousands of documents about allegations of brutality by Australian armed forces in Afghanistan; police also raided the home of a journalist about stories of top-secret plans for the country’s cyber-spying agency to monitor Australian citizens; and a radio host in Sydney said that he is under investigation for reporting intelligence agencies’ actions concerning six ships carrying asylum seekers. Officials denied that there is any connection between the operations or with the re-election of a conservative government last month.
GAY LIB: Homosexuality is no longer illegal in Botswana. High Court judges overturned the law in a case brought by a University of Botswana student. Homosexuality is still illegal in 30 of Africa’s 54 countries.
In Germany, the health minister announced the government’s intention to ban ‘conversion therapies’, which are aimed at supposedly ‘curing’ homosexuality. Jens Spahn said “Homosexuality is not an illness and therefore there is no need for therapy”.
Financial
VIRGIN’S BITTER EXPERIENCE: More troubles for Richard Branson’s transport focussed empire. His Virgin trains brand in the UK is popular with customers but not so popular with the various franchise authorities, something probably not helped by various legal actions taken by Virgin when it has failed to win new franchises. Now the Virgin brand has left the skies, at least across the Atlantic; the last Virgin Atlantic plane has turned blue, the colours of its majority owner Alaska Airways who acquired a controlling stake in the business in 2016. Branson has protested about this but as a minority owner there is not much he can do. Virgin is now mostly a brand which licences its name to other operators; and when that name gets tarnished, the operators move on. Stagecoach own 49% of Virgin Rail who dropped the ECML franchise two years ago and are now likely to lose the WCML franchise as well, failing, says the Department of Transport, to adhere to the terms of new franchise bids when it comes to pension funding (Virgin says that such compliance is unrealistic given the large current deficit in the relevant funds). And Alaska do not think that paying the Virgin licence fee adds value to their business.
EARL-Y BATH?: It’s not just transportation that is becoming difficult business; the commercial property business’s long run of growth since the collapse of 2008, shows all the signs of ending. Latest major player to announce potential trouble ahead is Capco, formerly Capital and Counties, a significant player in both commercial and residential development in the London market. Capco’s fortunes are increasingly bound up with one large site, the former Earls Court exhibition centre in west London. When Capco bought it six years ago, it looked like a licence to print money for many years: nearly 80 acres of land in a rapidly improving near-central London location with brilliant communications. But things have not gone to plan; there were fierce protests from locals, difficult planning conditions, a change of political control of the local authority causing delays and threats of compulsory purchase of parts of the site for social housing – and the London housing market seems to have gone into a problematic decline. Now Capco have announced they are writing the land value down to £412m and that parts of the project will be further delayed, with all the associated holding costs that entails.
EVERY LITTLE MIGHT HELP: Tesco, still Britain’s largest food retailer and doing well under the leadership of Dave Lewis, has good news for its low paid workers; it is increasing their hourly rate of pay by 10% over the next two years to take the lowest paid to a rate of £9.30 an hour. That is around a £1,500 a year rise for a full timer. But there is a bit of bad news too; the company is to abolish low paid workers bonuses, which vary with results but this year will be 3.5%. The change is to try to bring Tesco into line with other large employers of low paid and part time workers, such as its rivals Aldi and Lidl who pay around the new Tesco levels currently, but no, or minimal, bonuses (Tesco workers do get discount deals on shopping in the Tesco stores). Tesco believes employees prefer certainty of the hourly rate to varying bonuses, but the changes also reflect its increasing difficulties in recruiting staff in some areas, and especially for anti-social hours working. The bonus scheme for senior staff will not change; Dave Lewis got a £1.6m bonus last year.
