11 July 2019
Lens on the Week
HEAD TO HEAD: This week’s prize for political theatre has to go to ITV with its head-to-head debate between the two Conservative leadership contenders. Skilfully chaired by Julie Etchingham, the discussion laid bare differences between the candidates only to reveal that they were more tactical than substantial. Both will try to solve the issue of the Northern Irish border with technology in an effort to get a new Withdrawal Agreement place. Both would leave without a deal if this cannot be done. The posturing however, is different. Hunt rules out any question of proroguing Parliament to force through a no deal exit. That is clearly a red line. Johnson avoids giving a pledge by saying that he is not taking any options off the table, but it seems unlikely that he would attempt this procedural manoeuvre either. As to dates, Johnson promises to take the UK out by the end of October. Hunt says he would be prepared to let the date slip a little if a deal was in the offing. Would Johnson really point pull down the house if he felt that a few days more might land him a deal? Of course not. Piffle!
In other areas the difference was more marked and, although both potential leaders were for cutting taxes, they propose to do it in different ways. Hunt’s focus is on reducing corporation tax in order to boost the economy and increase the size of the national cake. Johnson would cut national insurance and increase income tax thresholds and the minimum wage. Hunt attacked the proposal to increase the higher rate income tax threshold as giving the party the wrong image. Should he become the next Chancellor of the Extractor, he will hopefully remember that he is paid to get the policy right and not focus on what looks good.
Another interesting difference was the handling of the current spat with the US over comments by the British Ambassador. Hunt pledged to leave him in place until the end of his term (he has now resolved the question by resigning). Boris, more cautiously, eschewed red lines by simply saying that the identity ambassador was a matter for the British government not the US to decide. A real difference in position? Probably not.
Although it didn’t expose deep divisions as to policy, the debate underlined an important difference in general approach. Hunt has plans for every eventuality no doubt with spreadsheets attached and well researched cross references. Boris is prepared to rely on broad political principles and to play the shots as they arise. The first approach sounds the more logical on the face of it but then there will be unpredictable negotiations with the EU and one recalls the wise words of Moltke the Elder:
“no plan of operations extends with any certainty beyond the first contact with the main hostile force”
Perhaps keeping it flexible is not such a bad plan after all.
DIPLOMAT RESIGNS: Our ambassador to the US, Sir Kim Darroch, has resigned following a spat with President Trump over emails leaked to, and printed by, The Mail on Sunday in which he said “We don’t really believe this administration is going to become substantially more normal; less dysfunctional; less unpredictable; less faction-riven; less diplomatically clumsy and inept.”
It is the role of ambassadors to send back frank appraisals of the regime to which they are accredited and Mr Corbyn put it well when he said that: “The comments made about [Sir Kim] are beyond unfair and wrong. I think he has given honourable and good service and he should be thanked for it.” Still, one can understand why Sir Kim did not feel that he could any longer do his job.
That turns the focus back to the leak. If discovered, the leaker will presumably be charged under the Official Secrets Act but the role of the newspaper needs to be investigated too. Did they do anything to promote the leak or to conspire with the leaker? Were they merely the lucky recipients of information which they must have known had been illegally leaked? What is the law on that? No doubt we shall all know before long.
LABOUR: Following endless consultations, Labour has now announced its Brexit position. That clarifies matters a bit but alas not very much. Although they are now pledged to call for a referendum and support Remain against any Tory Brexit proposals, Labour have not committed themselves to cancel Brexit if they win a general election. In that case they would work to honour the original decision on their own terms which would include a Customs Union and the application of EU workers rights. It looks suspiciously as if their approach to any proposals will hinge on who made them rather than on what they contain.
FOLLOW THE LEADER? This week the mainstream press caught up with Shaw Sheet which was puzzled last week by the reports of the appointment of a new president of the EU Commission by the EU Council of Leaders in Strasbourg (see Protests in Parliament). Somewhat belatedly, Bruno Waterfield pointed out in The Times that the appointment is only a nomination and will have to be put to a vote in the EU parliament in ten days time, and that the result is not necessarily a foregone conclusion: the leader of the EPP (the EU parliament’s biggest party), Manfred Webber, who would have been nominated as president under the spitzenkandidat system, is not happy to say the least about the EU Council of Leaders pulling the rug from under the parliament’s feet. “Suddenly we see that Macron and Orban are working together and damaging the democratic principles of Europe” he was quoted in Bild newspaper. Commenting on the EU leaders’ manoeuvres behind closed doors, even Mr Juncker admitted “The process was not very transparent”. Elsewhere in The Times, Ed Conway described the EU Council of Leader’s “weeks of backroom horse-trading” as having “all the transparency of a papal conclave.” As it happens, the strongest opposition to Ursula von der Leyen’s nomination comes from her fellow Germans; her record as defence minister is questionable, to say the least, so they are no doubt concerned at the lack of scrutiny. A recent poll suggested that only one in three Germans backs her appointment.
Anyone who found last night’s Tory leadership debate tedious and frustrating should comfort themselves with the thought that the whole selection procedure (including no doubt a general election before too long) is a lot more transparent and democratic than that which appointed Carrie Lam (selected as Hong Kong’s Chief Executive by the Chinese leaders in Beijing) or Ursula von der Leyen (selected as the president of the EU Commission by the EU leaders in Strasbourg). The citizens of Hong Kong and of the EU would appreciate the scrutiny and participation.
IRAN: Tehran announced that it has produced uranium enriched to a concentration of almost 5%, i.e. above the limit of 3.7% agreed in the 2015 nuclear deal. This blatant and defiant breach of the deal appears to be an attempt to force European countries to intensify their attempts to get round the US embargo against trade with Iran; the UK, France and Germany are doing what they can to salvage the deal – including setting up a payment mechanism which side-steps the dollar – but this is clearly not enough for Tehran, which has given them a deadline of September 07 to do more or it will continue enrichment to 20% and above. Mr Macron has said he will trigger the deal’s dispute resolution mechanism if the problem isn’t resolved by July 15.
Enrichment of 90% is needed for the production of nuclear weapons; but the apparently bigger jump from 20% to 90% is much quicker and easier than the jump from 5% to just 20%. Tehran is playing a risky game; their gambit may fail and drive the Europeans to side with the US, Israel, Saudi Arabia and the other anti-Iranian parties. Tehran’s blatant breach of the deal is not only risky but dangerous and irresponsible, and suggests that Europe should side with Iran’s opponents anyway.
In a separate development, British Royal Naval forces seized an Iranian-owned supertanker Grace 1 at Gibraltar, on suspicion that it was carrying oil to Syria; the transport of oil for Syria through the EU contravenes EU sanctions against the Assad regime and is a criminal offence. Iran has threatened to retaliate by seizing British oil tankers. A Royal Naval warship – the Type-23 frigate HMS Montrose – has been sent to the Gulf to escort the Pacific Voyager, a UK oil tanker.
DEEP FOUNDATIONS: A bit of history came to an end last week. R. Durtnell and Co, a firm of builders based in Brasted, Kent, ceased trading and called in the receivers. So what, you might think, builders cease trading all the time. But Durtnell had an unusual feature – it was founded in 1591 in the reign of Elizabeth I, and with a somewhat bitter irony, closed in the reign of Elizabeth II. Its first known project, Poundsbridge Manor in Kent is still in existence, but what seems to have finally brought the business down was intense competition, and low margins, leading to losses and negative cash flow. The final straw seems to have been a £22m project to refurbish the stables of the Brighton Pavilion, which is understood to have caused an unresolvable strain to the Durtnell cash flow. The firm was still run by the Durtnell family at the end, in the person of Alex Durtnell, who was thought to be the 14th generation at the helm. There are two older businesses – RJ Balson and Son, a Bridport, Dorset, butcher, and John Brooke and Sons, of Huddersfield, former woolspinners who now operator their mill as a business park. Both are over 500 years old and still run by their founding families.
DEEPLY CUTTING: Deutsche Bank, that strange amalgam of the old DeutscheBank of Germany and Bankers Trust of New York, announced at the end of last week that its head of investment banking, Garth Ritchie, a long time staffer, was leaving as the bank “enters a new phase”. Those were prescient words; the new phase began on Monday at dawn, as protection notices were issued to many staff. The bank will reduce its staff by 18,000 and most of those reductions will be by dismissal this week. The cull is across the global network, though with less impact in the USA, so London staff, forewarned by Far Eastern colleagues, were clearing their desks as the sun rose – and some did not bother to go in at all. This signals the end for Deutsche’s attempts to build a massive global investment bank – CEO Christian Sewing said that the bank has been trying to do too much and must cut back to a profitable core to save the business. £3bn in redundancy costs has been provided in the current quarter, though Sewing said the bank will still be moving to its new headquarters in the City shortly. The team there may find themselves with lots of space.
HIGHLY CHARGED: Better news from the West Midlands though: JLR (another amalgam, this one of Jaguar and Land Rover and now owned by Tata) announced it is accelerating its investment into electric vehicles by building a specialist battery plant in the UK. Their CEO, Ralf Speth, says that from a point of view of cost control, safety, and protection of supplies it is essential to have battery production close to its car plants and not rely on imports. JLR will turn the Castle Bromwich Jaguar factory into an all electric plant to build the new XJ car, and expects that most future models will be all electric – sensible for a producer of heavy luxury vehicles which is right in the firing line of government legislation and environmental campaigners, and concerned buyers. The last big announcement by JLR was a reduction in the workforce of 4,500 six months ago, and this commitment to an electric investment on such a scale should be reinvigorating for the company, and puts it a major bound ahead of competitors Mercedes and BMW.