11 July

@cstreetpartners

11 July

Good morning,

Regular readers of the Daily Briefing will know that we always select a cartoon to lighten up our content. The best ones get to the heart of the news in a single graphic and a clever caption.

Today’s choice succinctly links the issues of the day: the release of the Matthew Taylor report on modern working practices and Theresa May’s efforts to ‘relaunch’ her premiership on the first anniversary of her taking up the post today.
 
The findings of the government commissioned report into the gig economy will not come as a surprise given they were widely leaked in advance.
 
The review is expected to suggest a new category of worker called a "dependent contractor", who should be given extra protections by firms like Uber and Deliveroo. It also recommends that firms which have a “controlling and supervisory” relationship with workers would have to pay a full range of benefits. The BBC points out that this will include millions of pounds in national insurance contributions – which will, of course, be welcomed by HMRC.
 
The report’s proposals have already been attacked by unions who don’t believe it will help gig economy workers. TUC general secretary Frances O’Grady has said it will not be enough to “shift the balance of power” in the modern workplace.
 
Speaking to BBC Radio Four’s Today programme this morning, employment lawyer Patrick Green suggested the report could lead to “gentle cultural change”. 
 
Coincidentally, Theresa May will call for cultural change – gentle or otherwise – in a speech today, when she is set to offer opposition parties the chance to contribute policy, rather than “just criticise”. Jeremy Corbyn has, unsurprisingly, branded this as a show of weakness on May’s part and offered to furnish the Prime Minister with a copy of Labour’s manifesto as he continues to press for another general election.

 

NEWS

The public sector pay cap is in the spotlight again, this time for teachers. The Department for Education said it would accept the recommendation of a one per cent pay rise made by the independent pay review body. Labour has accused the government of causing a recruitment crisis in schools, while teachers’ unions have indicated that salaries will have fallen 15 per cent behind inflation since 2010. The increasing opposition to the pay cap puts further pressure on chancellor Philip Hammond for a rethink in the autumn budget.

Theresa May has suspended one of her MPs for a racist comment made during a meeting of Eurosceptics in London yesterday. The Huffington Post published the comment, made by Anne Marie Morris, the MP for Newton Abbott, yesterday afternoon with May acting quickly to withdraw the whip from Morris and suspend her. That decision reduces the Conservative party's working majority – which includes the backing from the Democratic Unionist Party - in the House of Commons to 12.

A report overnight reveals that Donald Trump Jr was told by an intermediary – British publicist Rob Goldstone – that he would be given damaging information on Hillary Clinton as part of a Russian government effort to help the Trump campaign.  While Trump Jr has said the meeting did not yield relevant information, US senators believe it is a clear signal that he had “both malicious intent and a desire to collude with Kremlin-connected Russian nationals, whether or not this particular collusion moved forward. Trump Jr was sending a clear signal to Putin’s allies and operatives that he was open for business.”
 
Britain will have quarter-finalists in both the men’s and women’s draws at Wimbledon for the first time since 1973. Andy Murray beat Frenchman Benoite Paire 7-6 (7-1) 6-4 6-4 on Centre Court, while Johanna Konta beat France’s Caroline Garcia 7-6 (7-3) 4-6 6-4 on Court One to become the first British woman to reach the last eight since 1984.

There is good news for coffee drinkers this morning – a recent study has found that people who drank about three cups of coffee a day lived longer than non-coffee drinkers. This is the result of a 16-year study of more than half a million people, so the results are pretty conclusive. Drink up.

 

BUSINESS AND ECONOMY

Shares in construction company Carillion dropped 39 per cent yesterday after it issued a profit warning. Payment problems on four construction contracts nearing or reaching completion forced it to take a provision of £845m,  which amounts to roughly four years of operating profit. Chief executive Richard Howson will step down and former Weir Group boss Keith Cochrane has been brought in as interim CEO.

British Retail Consortium figures show that retail like-for-like sales for June rose by 1.2 per cent compared to the month before, with the positive sales numbers attributed in part to good weather. Food sales also contributed to retail growth, rising by 3.6 per cent on a like-for-like basis. This is down to a weaker pound as food inflation contributes to a higher value of food sales.  

Leading City figures including John Flint, the head of HSBC’s retail banking arm, and Virgin Money chairman Glen Moreno, have backed a report urging the UK Government to revamp the Financial Ombudsman Service to make it easier for small and medium-sized enterprises to secure redress from banks. The recommendations, made by the BankingFutures initiative, come amid scrutiny of the way big banks treat smaller companies.

 

MARKETS

What happened yesterday
The FTSE 100 finished the day up 21.27 points at 7,372.19. BAE systems was the biggest climber, up 2.1 per cent, on the back of a High Court ruling that UK arms exports to Saudi Arabia are not unlawful.
 
The biggest fall of the day came from construction company Carillion, as described above. Balfour Beatty was among those caught in the cross-fire, down more than three percent as the news about Carillion affected stocks in the sector.
 
The FTSE 250 closed down 37.73 points at 19,357.41.

Finals
Collagen Solutions, Gateley (Holdings), Polar Capital Technology Trust

AGMs
JPMorgan Euro Small Co. Trust, LondonMetric Property, Marks & Spencer Group, Northern Investors Co, Palace Capital, Pets at Home Group, Perpetual Income & Growth Inv Trust, Young & Co's Brewery

Interims
Armino Technologies, Low & Bonar, Polar Capital Global Financials Trust

UK Economic Announcements 
(00:01) RICS Housing Market Survey

Int. Economic Announcements
(13:30) Wholesale Inventories (US)

 

COLUMNS OF NOTE

In the Telegraph, Tom Harris assesses Theresa May’s offer to cooperate with opposition parties, believing it is a sensible decision and a move to refocus on the Brexit negotiations. He also suggests it will put pressure on Jeremy Corbyn to accept, given he has said on more than one occasion that he is ready to govern.

The general reaction in Iraq and on social media to the recapture of Mosul has been one of joy and celebration, yet for others the feelings are mixed. The Conversation reflects on the massive political, economic and social challenges ahead for Iraqi society.

 

DID YOU KNOW?

Today marks the inaugural celebration of World Fringe day, celebrating 70 years of the Edinburgh Festival Fringe. The first fringe festival was held in 1947, when eight groups arrived in Edinburgh hoping to perform at the International Festival but were refused entry to the programme. They went ahead and performed anyway.

 

PARLIAMENTARY HIGHLIGHTS

TODAY

House of Commons
Oral Questions
Foreign and Commonwealth Office (including Topical Questions)

Legislation
Air Travel Organisers' Licensing Bill

House of Lords
Oral Questions
Guidance to local authorities clarifying what can be recycled

Debate
Steps taken alongside Gulf Countries to de-escalate tensions in the region and the action being taken to encourage Qatar to engage with its neighbours regarding concerns about extremism

Scottish Parliament 
In recess until 3rd September.

TOMORROW
House of Commons
Prime Minister's Question Time

General Debate
The Grenfell Tower Fire Inquiry 

House of Lords
Oral Questions
Proposals the Leader of the House has to create a close and constructive relationship between the House of Lords and the European Parliament 

Short Debate
Risks to NHS sustainability arising from the United Kingdom's departure from the European Union - Lord Warner