12 December 2018

Scott Reid

12 December 2018

Good morning,

Who can count to 48?

Judging by the number of times we’ve heard from certain Conservative MPs that the elusive number of letters required to trigger a no-confidence vote in the leadership of Theresa May (15% of Conservative MPs) has finally been met, you could be forgiven for thinking that some politicians can’t. 

And yet the breaking news this morning is has that the prime minister will face a vote of no-confidence in her leadership of the Conservative party this evening, between 6pm and 8pm. Speaking outside Downing Street shortly after 08.45am, Theresa May insisted that holding a leadership election now would cause unnecessary chaos, insisting she "would fight with everything she's got”.

Speculation in the Westminster bubble went into overdrive last night after sources described as either “close” or “extremely close” to rebellious Conservative MPs, depending on your taste for drama, briefed media commentators that the threshold had been breached. This time, they weren’t bluffing.

The man once again in the spotlight is Sir Graham Brady, chairman of the backbencher 1922 Committee. That Sir Graham has chosen to make the announcement ahead of May’s return to Westminster for Prime Minister’s Questions means today’s weekly grilling before MPs should make for plenty of theatre. 

Meanwhile, the prime minister has been keeping her head down, crisscrossing the continent in efforts to gain further concessions for her Brexit withdrawal deal. The reaction coming out of EU capitals seems to be one of bemusement, however; ‘Clarifications? Certainly. Renegotiation? No chance’, as one commentator hinted. In a move likely to annoy EU leaders further still, the government intends that a new vote won’t be held until the new year.

What happens next is anyone’s guess. May is due to address her party’s MPs ahead of the vote, in what is already being billed as the speech of her career. Now, 158 is the magic number of votes required to oust her. If she wins, May is safe from another challenge for another year, potentially allowing her to plough on with her Brexit plan. But if she loses, or even suffers a sizeable minority vote against her, her leadership could be fatally undermined, forcing her to resign as was the case with Margaret Thatcher in 1990.

However, this commentator is left wondering – if it has taken the would-be rebels this long just to club together 48 MPs to even consider ousting May, how on earth are they going to convince the necessary 158 MPs to vote against her later this evening? Surely that is the true test of their counting abilities. 

News

At least three people have been killed and 12 injured after a gunman opened fire at a Christmas market in Strasbourg yesterday. The suspect, whom the media have reported as known to French security services, remains at large. He fled the scene after exchanging fire with police and soldiers and hijacking a taxi. The French government has since raised its security alert level to “emergency attack”, strengthening security checks at borders and Christmas markets. 

The BBC has also reported of at least five people killed in a shooting at a cathedral in São Paulo, Brazil. The attack happened towards the end of a midday service in the Metropolitan Cathedral, police have said.

Time magazine has named the murdered journalist Jamal Khashoggi, alongside other reporters, its  person of the year. The magazine said that Khashoggi had dared to disagree with his country’s government, telling the world “the truth about its brutality.” The magazine also honoured Philippine journalist Maria Ressa, Annapolis’ Capital Gazette and Reuters reporters Kyaw Soe Oo and Wa Lone.

Business & Economy

WPP has announced a major restructuring which will cut around 3,500 jobs and is expected to save around £275 million annually. The advertising giant has estimated that the “radical evolution” will cost around £300 million to carry out and will create a further 1,000 news posts. The restructuring is intended to increase WPP’s digital capacity, and will largely affect administration. Shares in the company rose six per cent on the update.

Sainsbury’s former chief executive, Justin King, will join the board of Marks & Spencer as a non-executive director from January, the supermarket has announced. M&S chairman, Archie Norman – who worked with King whilst at Asda in the 1990s – said that the hiring “completes a very significant reorientation” of the board.

Huwawei’s chief financial officer Meng Wangzhou has been granted bail of C$10 million from a prison in Vancouver. Wangzhou still faces US fraud charges linked to her company’s alleged violation of sanctions on Iran, but was released after citing health concerns. President Trump has since told Reuters that he would intervene in the case if it appeared to serve national security interests or help progress a trade deal with China. 

Markets

What happened yesterday?

The FTSE regained some ground yesterday as the pound endured a bumpy day over Brexit-related politics. Rumours that the magic number of 48 no-confidence letters in the prime minister’s leadership had been reached led the pound to finish down on both the euro by 0.28% at €1.10 and on the dollar by 0.60% at $1.25.

The London market, meanwhile, finished up 1.3% at 6806.94, having strengthened on positive jobs data and strong showings from the likes of WPP and Ashtead. According to the ONS, there were an estimated 32.48 million people in work during the third quarter, implying an employment rate of 75.7%, the highest since records began in 1971. Average weekly earnings in nominal terms were also up 3.3% year-on-year.

Topping the corporate leader board were Anglo American (up 5.50%), Antofagasta (4.71%), Glencore (3.35%) and Rio Tinto (3.27%) whose stock all rose on the lower pound. Wood plc (up 4.99%) also jumped ahead of an expected positive trading update on Wednesday.

Standard Life (down 1.90%) was the day’s biggest loser after a downgrade by RBC Capital Markets described the life assurer as ‘sector perform’. Lloyds Banking Group (down 1.06%) and RBS (029%) were also dragged lower as contagion hit sector. 

Finals
Local Shopping REIT

AGMs
Aberdeen Frontier Markets Investment Company
Alternative Liquidity Fund Limited       
Blancco Technology Group
BowLeven       
Bellway
Volution Group (WI)    
Fidelity Special Values 
International Biotech Trust      
Imaginatik
Netcall
Orchard Funding Group
Pipehawk        
YouGov

Interims          
Dixons Carphone
Evgen Pharma
The Fulham Shore
Polar Capital Technology Trust
Superdry

Intl. Economic Announcements
(10:00) Industrial Production (EU)
(12:00) MBA Mortgage Applications (US)
(13:30) Consumer Price Index (US)
(15:30) Crude Oil Inventories (US)
 
Trading Announcements         
British American Tobacco        
Blancco Technology Group
Wood

Columns of Note

In The Times, Alf Young laments that the Brexit psychodrama has side-lined an important day for the Scottish Government as it presents its draft Budget. Young suggests that the economics of the wider UK political crisis have diminished the significance of the budget. (£)

Jim Armitage writes in the Evening Standard that les gilets jaunes affair in France will not endear would-be City movers to up sticks from London to Paris. Armitage suggests that President Macron’s decision to raise spending has undermined business confidence in his leadership when faced with social protest. Britain may face a crisis of its own, he concludes, but the recent struggle shows that France still has twentieth century labour challenges to overcome. 

Did you know?

Danes were reputed to hate the letter Q so much that the country’s parliament legislated to remove it from the Danish alphabet in 1872.

Parliamentary Highlights
 
TODAY
 
House of Commons
Oral questions
Northern Ireland
 
Prime Minister's Question Time
 
Ten Minute Rule Motion
International Trade and Development Agency - James Cleverly
 
Legislation
Courts and Tribunals (Judiciary and Functions of Staff) Bill [Lords] - remaining stages
 
Adjournment
Development of the artificial pancreas for people with type 1 diabetes - Mr George Howarth

House of Lords
Oral questions
Providing serviced plots for self- and custom-built homes in order to meet social and other housing needs - Lord Naseby
 
Recent trade deal to supply 50,000 lambs killed without stunning to Saudi Arabia - Lord Trees
 
People’s Vote on Brexit - Lord Dykes
 
Interserve’s financial situation and the impact this may have on the provision of public services - Lord Haskel
 
Legislation
Health and Social Care (National Data Guardian) Bill - Third reading - Baroness Chisholm of Owlpen
 
Prisons (Interference with Wireless Telegraphy) Bill - Third reading - Baroness Pidding
 
Homes (Fitness for Human Habitation) Bill - Committee stage - Lord Best
 
Organ Donation (Deemed Consent) Bill - Committee stage - Lord Hunt of Kings Heath
 
Debate
Report from the Science and Technology Committee 'Off-site manufacture for construction: Building for change' - Lord Patel
 
Short debate
Celebrating the 250th anniversary of the founding of the Royal Academy of Arts, and the contribution made by the Academy to the artistic and cultural life of the country - Lord Cormack
 
Scottish Parliament
Portfolio Questions
Health and Sport
 
Ministerial Statement
Brexit Update
 
Scottish Government’s draft spending and tax plans for 2019-20
 
Members’ Business
Remembering the Korean War – Gordon Lindhurst
 
TOMORROW
 
House of Commons
Oral questions
Digital, Culture, Media and Sport (including Topical Questions)
 
Attorney General
 
Business Statement
Business Questions to the Leader of the House - Andrea Leadsom
 
General debate
Public Health Model to reduce youth violence - Mrs Theresa May
 
Adjournment
Rural post offices - Derek Thomas

House of Lords
Oral questions
Repealing the exemptions from the requirement for wheeled goods vehicles to be fitted with sideguards - Baroness Gardner of Parkes
 
Discussions between the BBC and Public Health England regarding a joint strategic plan on childhood obesity - Lord Brooke of Alverthorpe
 
Report by the National Institute of Economic and Social Research, 'Brexit and the Health & Social Care Workforce in the UK' - Baroness Wheeler
 
Revised Government estimates of the cost and timetable for completing HS2 - Lord West of Spithead
 
Short debate
The role of the government's 'Strategy for Disability Inclusive Development' towards meeting the UK’s commitments given at the Global Disability Summit - Baroness Anelay of St Johns
 
Debate
Establishment of a UK-wide Constitutional Convention to address issues of democratic accountability and devolution, especially in England - Lord Foulkes of Cumnock
 
Challenges facing young people - Baroness Armstrong of Hill Top
 
Scottish Parliament
General Questions
 
First Minister’s Questions
 
Members’ Business
St Andrews’ GP Out-of-hours Facility – Willie Rennie
 
Ministerial Statement
The UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill – Reference by the Attorney General and the Advocate General for Scotland to the UK Supreme Court
 
Scottish Government Debate
Demonstrating leadership in human rights
 
Final Stage
Pow of Inchaffray Drainage Commission (Scotland) Bill