31 October 2019
Lens on the Week
UK
ELECTION FEVER: Once the SNP and the Liberal Democrats had declared themselves in favour of an election and had suggested setting aside the requirement for a two thirds majority under the Fixed Term Parliaments Act with a new Bill, a December poll became inevitable and Labour accepted that inevitable by supporting it. Although 12 December is still six weeks away, the parties have a lot to get through by way of preparation. The Conservatives have opened the batting by restoring the whip to Ed Vaizey, Margot James, Greg Clark, Nicholas Soames, Alistair Burt, Caroline Nokes, Richard Benyon, Stephen Hammond, Steve Brine and Richard Harrington, thus enabling them to stand as Conservative candidates. Some, like Sir Nicholas Soames, are retiring anyway but presumably the rest have indicated that they will support the new Withdrawal Agreement.
Others, however, still out in the cold, include Oliver Letwin, Philip Hammond, David Gauke, Rory Stewart and Ken Clarke. Some of them no doubt have turned down readmission: others are too closely associated with Remain to accept the likely form of the Conservative manifesto. Dominic Grieve is to stand as an independent Conservative and the Liberal Democrats have indicated that they will not field a candidate against him.
Although the recent expulsions from the whip make the choice of Conservative candidates the most interesting, there are likely to be reselection issues within Labour as well. Expect a week or two of political musical chairs!
GRENFELL TOWER FIRE: The first part of the report being prepared by the enquiry chaired by Sir Martin Moore-Bick has now been published. It deals with the role of the London Fire Brigade although not with the cladding of the building which will be discussed in the second part. While Sir Martin’s report praises the courage of the firefighters who attended, it is highly critical of the way in which the Brigade prepared them for an incident of this sort with the result that disastrous errors, such as telling people to remain in the flats, were made. In a particularly damning passage Sir Martin commented in relation to evidence given by Dany Cotton the LFB Commissioner:
“Quite apart from its remarkable insensitivity to the families of the deceased and to those who escaped from their burning homes with their lives, the Commissioner’s evidence that she would not change anything about the response of the LFB on the night, even with the benefit of hindsight, only serves to demonstrate that the LFB is an institution at risk of not learning the lessons of the Grenfell Tower fire.”
The tenant of the flat in which the blaze started has been exonerated from blame.
VAZ SUSPENDED: Keith Vaz, Labour MP for Leicester East, has been banned from the Commons for 6 months for offering to buy drugs for sex workers and misleading the Commissioner on Parliamentary Standards. Mr Vaz has served as a minister, as chairman of the House of Commons Home Affairs Select Committee and on the National Executive of the Labour Party.
MIGRANT DEATHS: The deaths of 39 migrants in a refrigerated lorry have drawn attention to the industrial scale on which border controls are avoided by criminal gangs. It now appears that controls are not efficiently enforced at all, encouraging families in poorer countries, such as various parts of Vietnam, to send over young people who will remit earnings home, the debt to people smugglers being presumably seen as an investment worth incurring for the cash later generated.
International
Turn right at Europe, turn left at Latin America, but the middle’s nowhere:
GERMANY: The far right Alternative for Germany (AfD) beat Angela Merkel’s governing centrist party the Christian Democrats (CDU) into third place in elections in the state of Thuringia. Following similar gains in last month’s elections in two other states (Saxony and Brandenburg), the AfD more than doubled its support, with about 24% of the vote. The CDU lost its lead, shrinking to 21%, and the other centrist party, the left-leading Social Democrats, gained a mere 8%, only just enough to scrape into the state parliament. The Left party took the lead with 31% of the vote. Commentators have pointed out that this is the first state election in which no centre party has won a majority.
ITALY: Elections in the region of Umbria, governed by the left for the past fifty years, were convincingly won by the far right. Donatella Tesei became governor with 57% of the vote. She stood for the League, Matteo Salvini’s party, which won 37%; she was also supported by the far right Brothers of Italy (10%), Silvio Berlusconi’s centre right Forza Italia (6%) and two other parties. It was a disaster for the newly-formed national governing coalition of the populist Five Star (a mere 7%) and the centre-left Democratic Party (only 22%). Their unlikely coalition is looking increasingly uneasy; it was formed in haste early this year in order to deprive Matteo Salvini of the election he tried to precipitate by pulling his League out of government and breaking his partnership with Five Star.
SPAIN: Polling ahead of next month’s general election suggests that the nationalist right could well double its seats in the Cortes. The far right party Vox, currently with 24 seats, is projected to win more than 40. The centre right Popular Party, currently with 66 seats, could win more than 100. Other parties such as Citizens could bring the right’s tally up to 160 seats. The governing Socialists could lose 5 seats, leaving them with 118, even shorter of the 176 necessary for an outright majority than they are at the moment. It’s thought that a reaction against the Catalan independence movement and the removal of General Franco’s remains from the Valley of the Fallen has strengthened support for the nationalist right.
ARGENTINA: Argentina has a new president. The left wing Peronists are back in power with the election of Alberto Fernandez. He was chief of staff to Nestor Kirchner, president 2003-2007, and his running mate was Christina Kirchner, president 2007-2015. The defeated president, conservative Mauricio Macri, was punished by voters for failing in his promise to repair the country’s economy and restore its prosperity. He inherited an impoverished Argentina from the Kirchners and four years later it’s still in a deep recession.
Financial
SPACED OUT, CASHED IN: This is a story we could not run on 1st April… In New York on Tuesday Virgin Galatic announced listing of its shares for purchase by the general public. The space travel company, which aims to take passengers into orbit way above the planet at a mere $US250,000 a trip, says it has 600 passengers with deposits paid. It is coming to the market via a merger with Social Capital Hedosophia, an investment fund, and the opportunity for the public to get on board the company, if not its spaceships, comes after Virgin have failed to find a substantial private investor, its original preference. Boeing, the aircraft maker has put $20m in, and Richard Branson, whose Virgin brand the venture carries, is also a significant shareholder. Virgin Galatic has some serious competition, believe it or not, including SpaceX, a rocket company owned by Elon Musk of Tesla, and Blue Origin, the venture of Jeff Bezos of Amazon. Both those have greater ambitions than the Virgin rocketry – Blue Origin aims to take passengers to the Moon in around 2025, and Mr Musk mentions Mars as a potential destination. Quite how these ambitions square with the environmental concerns of all three gentlemen is not clear – we presume Greta Thurnberg will not be boarding their flights.
CASHED OUT: Marks and Spencer is about to take a further step away from its traditional approach to customers; it is going to offer easy access credit. It is not calling its new product that of course. M&S says it is a mobile phone friendly easy access (no credit checks or scoring apparently) way to “buy now, pay later” and that at least initially the credit will be offered interest free. But don’t get too excited and plan to buy loads of extra Christmas goodies. The maximum credit period will be six weeks, the maximum debt allowed £800, and it must be repaid in not more than four instalments. Marks and Spencer is not the only retailer to be offering this product, which is managed by the Australian financial services company Clearpay; JD Sports and Asos have also begun similar schemes within the last few months. The idea is to enable the low paid to make larger purchases which may need a couple of pay cheques to finance them, and keeps customers away from high cost credit providers. For those wanting larger amounts or longer periods M&S also have their own financial service division which has performed well since being set up some 20 years ago.
CASH MILKED: More trouble for Britain’s hard pressed dairy farmers, who have struggled for years against powerful purchasing groups, declining demand, overseas competition, and rising costs. This week one of the largest processors of milk in the UK collapsed. Tomlinsons of Wrexham, who took milk from Welsh and west Midlands farmers and processed it for sale through J Sainsbury and Waitrose closed abruptly, after reporting cash flow difficulties , and (it is rumoured) loss of part of its Sainsbury business. Given that cows have to be milked twice a day and the milk cannot be stored long, this has created major problems for farmers, to say nothing of concerns about getting paid for past deliveries in such a low margin business. In the last ten years the number of dairy farms in the UK has shrunk from around 12,000 to about 8,500, and although a small proportion of this is acquisitions and consolidation by other producers, most of it is farmers leaving the business.
