21 November 2019

Lens on the Week

UK

MANIFESTOS:  The Green party has been the first to publish its manifesto so they deserve it to be given first place.  Among the pledges are:

• to borrow £100 billion a year for green issues;
• carbon neutrality by 2030;
• votes for 16 year olds;
• proportional representation;
• income of £89 per week for all adults by 2025;
• a ban on nuclear energy and fracking;
• a carbon tax on fossil fuels designed to make them uncommercial;
• a 24% rate of corporation tax; and
• an increase in NHS spending of £6bn a year to 2030.

Second out of the gate are the Liberal Democrats.  Promises include:

• to cancel Brexit;
• 20,000 more teachers;
• a frequent flyers levy;
• 80% of energy to be renewable by 2030;
• a grant of £10,000 per adult towards future education and training;
• more childcare;
• an increase in spending on the NHS;
• railfares for commuters and season ticket holders to be frozen for 5 years; and
• more money for the NHS.

The Greens are in a pact with the Liberal Democrats and Plaid Cymru  under which the members will not compete in certain seats under the Agreement to Remain.

ELECTION DEBATE:  Following the failure of legal action designed to force the inclusion of other parties, the head-to-head ITV debate between Boris Johnson and Jeremy Corbyn has now taken place with clashes on the NHS, Brexit and other topics.  The main issue however is not so much the content of the debate as the labelling of a Tory website as a fact checker implying that it was independent.  Although probably not very significant in itself it makes you wonder how anyone at campaign headquarters thought this was a good idea since there was no chance whatever of getting away with it.  Still, we will doubtless see worse from all parties before all is done.

HOSPITAL REPORT:  An interim report into the maternity unit at the Shrewsbury and Telford Hospital NHS Trust has been leaked to the press.  It shows multiple failures in the care provided and callousness in the attitude of staff.  Although the report was originally into 23 cases, its remit has now been increased to more than 270 including 22 stillbirths.  It appears that a previous review in 2017 by the Royal College of Obstetricians and Gynaecologists failed to get to grip with the issues.

SIMON CHENG:  Mr Cheng, a local worker at the UK’s consulate in Hong Kong released after being held and tortured by the Chinese security services, has given an interview to the BBC.  Arrested at the Kowloon border post on his return from a trip to mainland China in August, he was accused of betraying the motherland and soliciting prostitution.  In fact Mr Cheng’s role was to try to attract investment in Scotland and to gather information for the consulate on the protest movement, normal functions of a consulate.  Both Britain and China have protested at each other’s behaviour and Mr Cheng is now in the UK on a two year working visa.

International

HONG KONG:  Violent conflict continues to escalate.  Thousands of students made a stand at the Polytechnic University, barricading themselves in against a siege by the police.  The students armed themselves with slingshots, firebombs, paint bombs and bows and arrows against police using water-cannon and tear-gas and carrying firearms.

Meanwhile, China’s National People’s Congress Standing Committee dismissed the Hong Kong High Court’s ruling which had overturned the Hong Kong government’s ban on the wearing of masks.  Could this be the beginning of direct intervention by Beijing in the Hong Kong crisis?  It will certainly highlight the constitutional concerns at the heart of the pro-democracy, pro-independence protests.

IRAN:  Violent protests erupted across the country following a rise of between 50 and 300 percent in petrol prices.  Peaceful demonstrations and anti-government anger escalated, with protesters blocking roads and setting fire to petrol stations, banks and government buildings.  The authorities shut down the internet, police reportedly used water-cannon and live shot, thousands of protesters have been arrested, at least ten people have been killed (including one policeman) and dozens have been wounded.

These protests complete the arc of angry demonstrations throughout the crescent of influence which Iran’s regime has recently established right across the region, from Tehran west to the Mediterranean.  This sphere of influence appeared to be a triumph for Tehran, but now it’s beginning to look like imperial over-reach with anti-Iran protests breaking out in Iraq and Lebanon and with pro-Iranian militias still bogged down in Syria.

ISRAEL:  US secretary of state Mike Pompeo announced that the USA no longer considers Israel’s settlements on the West Bank to be illegal under international law.  This overturns the conclusion of the Carter administration forty years ago, which conformed to the international consensus that Israeli settlement of the occupied territories was against the law.  The announcement was welcomed by Binyamin Netanyahu, Israel’s embattled prime minister, and no doubt will help him politically at a time when his grip on power is tenuous in the extreme.  The EU confirmed its view that Israeli settlement of occupied Palestinian territory is illegal.

Financial

PLUGGING IN:  In what is seen as a further blow to Britain’s motor industry, Elon Musk, the entrepreneur behind electric car builder Tesla, has announced that the company’s new battery plant will be built not in the UK, but in Berlin.  It had been widely expected that the plant would be in Britain, following Mr Musk’s 2016 praise of car innovation in the UK, but in a speech last week Mr Musk said that Brexit uncertainties had made it currently too difficult to justify large scale investment in the UK.  Although the UK has a lead in European technical innovation, Germany produces more than five times as many cars as the UK, and post Brexit may be an easier European sales base.  Electrical power is also an area that Germany needs to invest heavily into – the three car giants there have been somewhat wrong footed by the rapid growth of electric motoring.  Motor industry commentators suggest a further reason for the Tesla move into Germany – quality control has been a serious weakness for Mr Musk’s business and an injection of German expertise and controls on the assembly line may be essential to competing in the luxury car market.

SUNNY PROSPECTS:  Another American entrepreneur, one with deeper pockets, is also looking at new energy sources.  Bill Gates is helping fund Heliogen, a Californian based new business which intends to harness the sun to produce power.  That’s hardly new, but Heliogen, run by Bill Gross, is using mirrors to produce highly concentrated energy inputs – three times more than the most modern solar panel systems, giving heat of over 1,000 degrees, and possibly up to 1,500 degrees, which would enable hydrogen splitting to take place, and be a real boost for hydrogen based power.  This solves one of the issues of current solar powered systems – getting enough energy out of green installations for industrial uses.  Top of the list is making concrete – in itself potentially an environmentally friendly material due to its very long life and ability to store heat, but immensely energy intensive to make.  The new sun and mirror technology creates enough power to fuel concrete making plants and indeed steel making, and in the commercial sector would be a big step towards creating 100% green industrial processes.  As Gates says: “If we’re going to get to zero carbon emissions overall, we have a lot of inventing to do.”

DESERTING THE FLOAT:  Aramco, which we spotlighted last week, is still struggling with its proposed flotation.  The last year has been one step forward and often seemingly two steps back as the Saudi state oil company struggles with a whole range of issues deterring potential investors from supporting an IPO.  These range from the political (the future of the Kingdom; the Khashoggi affair) via terrorism (the attack, believed to be Iranian inspired, on Aramco’s major refinery) to simple economics (the slow weakening of the oil industry as the world increasingly moves to green energy).  The fundraising target price for the business originally sought a value of USS2trillion, but this has recently been scaled back to $1.7trn; and even this looks in doubt as the company this week cancelled investor presentations in London, the USA, and in the Far East.  It looks as though the initial offering will be mostly to local Saudi investors with an aim of raising $25bn to $50bn, with a later push to international investors once the stock has traded for a while.  That represents a tiny fraction of the shares, which will remain entirely Saudi government controlled – another issue for investors.