19 December 2019
Lens on the Week
ELECTION: As the Conservatives stormed to victory over the UK as a whole, gaining a majority of eighty, results in Scotland and Northern Ireland are particularly noteworthy.
In Scotland the Tories lost 7 of their 13 seats and Labour all but one of theirs. The gainers were the SNP who won 48 out of the total of 59. The vote split as follows: SNP 45% of vote, Tories 25%, Lib Dems 9.5%, Labour 18.6%. Although the SNP now hold a substantial majority of seats they still command less than 50% of the popular vote.
In Northern Ireland both the DUP and Sinn Fein saw a decline in their percentage of their votes. The DUP lost two seats but Sinn Fein came out even, with one won and one lost.
LABOUR: Labour’s search for a new leader following their election defeat has got off to an inauspicious start. Yes, Macdonnell has taken the blame on that politicians’ confessional, the Andrew Marr show, but McCluskey of Unite and other left wing figures still insist that their policies were popular with the electorate but that they lost because of the media’s smearing of Corbyn and Brexit. If that is right presumably they need a leader who will try the same manifesto again in five years time? Meanwhile, over on the right, Emily Thornberry has been accused by Caroline Flint of telling one of her colleagues representing a leave constituency that her (Thornberry’s) constituents are brighter than theirs. That is thought to be a bad thing and Thornberry denies it and has sought legal advice although it would presumably have been much worse if she had described her own constituents as stupider.
Meanwhile first prize in the fatuity stakes goes to those who think that the most important thing is that the new leader should be a woman. Surely the important thing is that whatever their sex they are the best person for the job.
CULTURE SECRETARY: The PM rushed a peerage through for Nicky Morgan, who had stood down as an MP, so that she can continue as culture secretary. Her government department will be the first to be run by a peer since Lord Adonis was Gordon Brown’s secretary of state for transport and Lord Mandelson was his secretary of state for business.
RAIL TIMETABLES: The introduction of a new timetable by Northern Rail got off to a rough start with a series of cancellations, 19 trains having been cancelled and 31 delayed by 10 am on Monday. If Mr Johnson is serious about prosperity for the north of England, improved infrastructure must be a priority.
NORTHERN IRELAND: The aftermath of the general election has seen new energy going into the restoration of the Northern Ireland Assembly with Mr Johnson and Mr Varadkar adding their authority to moves by the Northern Ireland Secretary Julian Smith to bring the parties together.
In a move which could restrict the dividends from water shares, the Regulator OfWat has said that water companies will have to reduce consumer bills by an average of £50 over the next 5 years and invest heavily in infrastructure and preventing leaks. Dissatisfaction with the performance of the industry was one of the drivers behind the Labour proposal to nationalise it.
TURKEY / GREECE: Tension is rising in the eastern Mediterranean over ownership of undersea resources. Last week, Turkey agreed a maritime border deal with Libya in which Turkey will help to arm the government in Tripoli (which is currently at war with the government in Tobruk) in return for rights to the gas and oil under the sea between the two countries. Unfortunately, those seas include the territorial waters of other countries such as Egypt, Greece and Cyprus. Greece has objected and has expelled the Libyan ambassador in Athens. The EU has condemned the deal, declaring it to be illegal.
Greece and Turkey have been in dispute over drilling rights for oil and gas off the shore of Cyprus for some time. Turkey insists that Greek Cyprus (an internationally recognised state) should share the rights with Turkish Cyprus (a state recognised only by Turkey); the government of Greek Cyprus says it would be willing to share the resources if a peace deal is agreed and the island reunited. Turkey has already sent three ships – two drillers and one explorer – to the disputed waters, and this week it announced that they would have military back-up in the form of armed drones to be flown from Gecitkale airbase in Turkish Cyprus (the Turkish army is a major producer and user of drones). Greece is responding by buying armed drones from the USA and Israel and by putting its military on alert.
FRANCE: President Macron’s embattled plans to reform his country’s pension system suffered a blow this week with the resignation of Jean-Paul Delevoye, the government commissioner who was instrumental in drawing up those plans. M Delevoye stepped down after it was revealed that he had failed to declare a dozen external posts, contrary to transparency laws. One job was with a body which critics say could benefit from the reforms; another paid an annual salary which he has agreed to pay back (he was not entitled to earn anything other than his salary as commissioner). The episode has played into the hands of those critics of Macron who accuse him of being a “president of the rich”.
Trades unions and public sector workers continue their robust protests against the reforms. Transport strikes, which are paralysing the country, are into their third week. Teachers, doctors and other public sector workers also came out on strike this week. Demonstrations in Paris, Nantes and Lille turned violent, with clashes between police and protesters involving tear gas, petrol bombs, bricks, stones and “a home-made explosive device”. Polls show that the majority of the population supports the strikes, with one poll showing support to be above 55%.
USA: The House of Representatives will vote this week for or against the impeachment of President Donald Trump, who is being accused of abusing his office and obstructing Congress over his alleged withholding of aid from Ukraine unless Kiev gave him information harmful to his political rival Joe Biden. If the vote goes against the president (as it is likely to – the Democrats have a majority in the House), he will go on trial in the Senate next month.
NO SURPRISE: It’s a fair bet that whatever 2020 holds, it will not be good news for high street retailers. The public are increasingly in love with on-line shopping – sitting down with their laptop and ordering their needs and luxuries on line. That seems to apply to Christmas shopping as much as quotidian demands – with footfall in most shopping malls and high streets down on last year – though there’s a week to go yet, so those of you who want to save your local edifice of marble and gloss have still time to get down there. Also disrupting retail shopping patterns is the recently developed urge of the retail industry to kick itself in the shins – better known as Black Friday. By heavy discounting pre-Christmas, the industry is knocking back full-spend shopping at what should be the most remunerative time of year. The cumulative effect of this is said to be footfall in major shopping locations 5% down – and spending is thought to be down a lot more. Good for shoppers, and given the modern consumers propensity to spend, that money will be going into the economy somewhere – but not through a shop till.
NEW NAME: One retail chain that seems to buck the trend, at least in parts, is the column’s regular feature, Sports Direct. Or very shortly, Frasers, the new name which Mike Ashley announced he will be giving to his major retail businesses. Frasers is of course derived from House of Fraser, which Mr Ashley bought in July this year. His intention was to take it up-market and differentiate it from Sports Direct, but HoF trading has been disappointing and a store by store review is being carried out, which Mr Ashley has said will result in a continuing pattern of closings or down-sizings, with the offer in some of the remaining stores moved down-market rather than up. However, overall, business appears to be good, with sales up 14% to £2bn, and profits up 58% to £102m (that includes a number of smaller takeovers in 2018 and 2019). Also announced was a new bonus scheme for the non-board staff of the business, which it is envisaged will see up to £100m worth of shares going to eligible staff – the details are not yet worked out in full. The share price reacted well to all this good news, rising by 25%.
LOOK NORTH: As Boris urges us, we must not forget the north of England; soon, it hopes to be the subject of much tax payer largesse, as spending on large infrastructure projects gets underway. Quick off the mark is Andy Burnham, mayor of Manchester and former (Blairite) Labour M.P. who has already urged the new Conservative government to get spending quickly, so that the benefits are felt as quickly as possible. He especially cites the need to improve rail infrastructure – local services, mostly run by Northern, are unreliable and overcrowded, and trans-Pennine much the same. (What Mr Burnham did not say was that a lot of this due to hurried but botched introductions of new trains which have not been properly tested pre-introduction.) More controversial will be road links east-west which need another motorway across the Pennines to relieve the overcrowded M62. Manchester has had a long record of strong local leadership over the last 30 years or so, making it the second city of England for business (along with its neighbour across the Irwell, Salford). Mr Johnson and his new ministers would be well advised to make a friend of Mr Burnham, whose energy and enthusiasm can only be an asset to northern growth.