The Brexit process moved forward yesterday as the Government unveiled the Great Repeal Bill. The bill is two-fold. Firstly, it will repeal the 1972 European Communities Act which took the UK into the EU and gave EU law precedence over UK law. Secondly, it will copy all existing EU legislation into UK law to avoid any black hole in the statute book. The UK Parliament can then "amend, repeal and improve" the laws as necessary.
However, ministers will face a fight to get the bill passed.
One of the issues with the bill is that simply absorbing EU law into UK law will not be sufficient as references to EU institutions will also need to be removed. As a result, the Great Repeal Bill allows the “correction of the statute book where necessary” without full parliamentary scrutiny. This, critics argue, gives ministers sweeping powers to make decisions with little accountability.
Labour has already said that it will not vote in favour of the bill in its current form, whilst the Liberal Democats have promised “hell” for the government.
Further to this, the Scottish First Minister Nicola Sturgeon and Welsh First Minister Carwyn Jones have vowed to block the bill. The consent of both the Scottish and Welsh legislatures is required as the bill covers devolved policy areas.
Meanwhile, the EU’s chief negotiatior, Michel Barnier, met with Nicola Sturgeon and Jeremy Corbyn in Brussels yesterday.
The Labour leader presented his host with an Arsenal shirt. The government will no doubt be hoping that Monsieur Barnier’s ability to slot his negotiating goals is more Francis Jeffers than Thierry Henry.
The Home Office has announced a crackdown on “legal highs” and “chemsex” drugs as part of a new drugs strategy. Although the number of 16 to 59-year-olds using drugs has fallen from 10.5% to 8% in the last decade, the government is worried about the use of new psychoactive substances (NPS), performance enhancing drugs and prescribed medicines. In addition, the latest figures show that drugs cost the UK £10.7 billion a year in policing, healthcare and crime.
The Metropolitan Police is investigating five acid attacks that took place within 90 minutes in London last night. A pair on a moped attacked other moped riders and allegedly tried to steal their bikes, with one of their victims has suffered “life-changing” facial injuries. A teenager has been arrested on suspicion of grievous bodily harm and robbery, and enquiries are ongoing.
French President Emmanuel Macron will give Donald Trump a welcome respite from US domestic politics today as the two leaders watch the Bastille Day parade in Paris today. This year marks the 100th anniversary of the US entry to World War I. Macron portrayed himself as America’s best friend in Europe as he laid on an extravagant welcome for President Trump in Paris yesterday, filling the void left as Theresa May focusses on Brexit negotiations.
Business & Economy
The chief executive of Visa has vowed to “put cash out of business” as it was revealed that the payments giant plans to agree cashless deals with British retailers and restaurants. The deals would see free contactless technology upgrades and lump sum payments in exchange for banning customers from paying with cash. Critics have said that this could unfairly discriminate against the elderly who still use cash and cheques.
The Office for Budget Responsibility has warned that the UK’s public finances are in worse shape to withstand a recession than they were in 2007, and that the country faces the twin threat of an economic downturn and Brexit. The independent forecaster also suggested that another recession is inevitable as the UK has experienced one in every decade since the 1970s.
The government has bowed to pressure from small business owners after it delayed plans to force millions of small businesses to update the taxman four times a year instead of once. The new “making tax digital” reforms were due to be in place April 2018 and were estimated to affect 1.6 million companies, 2.4 million self-employed and 900,000 residential landlords. However, the smallest businesses will now be exempt and other companies allowed more time to put processes in place.
What happened yesterday?
The FTSE 100 ended Thursday down 3.71 points at 7,413.22.
Shares in pharmaceutical giant Astrazeneca took a tumble, falling 3.6% after a report featured on Calcalist – the Israeli business outlet – which said that its chief executive, Pascal Soriot, is to leave the company to join Teva Pharmaceutical Industries.
BT was the best performer on the index after being given a “buy” rating by Numis, the UK broker. Shares in the telecoms company were up 4% at the close of trading.
Retailers also had a good day after strong results from French supermarket Casino lifted shares in the sector across Europe. Marks and Spencer climbed 3.6% and Next rose 2.2%.
On the currency markets, the pound was up 0.3% against the dollar to $1.2923 and 0.5% higher against the euro at 1.135 euros.
Allianz Technology Trust
Ashmore Group, Hays, NewRiver REIT
DCC, Kemin Resources, NewRiver REIT, Workspace Group, ZCCM Investments Holdings ‘B’ Shares
Bahamas Petroleum Co
International Economic Announcements
(11:00) Balance of Trade (EU)
(13:30) Consumer Price Index (US)
(13:30) Retail Sales (US)
(14:15) Capacity Utilisation (US)
(14:15) Industrial Production (US)
(15:00) Business Inventories (US)
(15:00) U. of Michigan Confidence (Prelim) (US)
Columns of Note
Writing in the Financial Times, Tim Harford argues that more radical reforms than those outlined in the Taylor Review are necessary if we are to take advantage of the gig economy. He asserts that the power of the worker is based on their ability to walk out and take a better offer which, in principle, the gig economy provides. However, he also points out that benefits, such as sick leave, pensions, holidays and healthcare, are provided by corporations and that, as the gig economy grows, government may need to take a larger role.
In The Times, Ed Conway contends that the UK will face difficulty striking trade deals after it leaves the EU. This is due to the fact that the UK economy is largely based on services and that what really matters is not tariff-free access to markets, but non-tariff barriers – essentially the harmonisation of regulations. Britain’s future economic health, he says, will depend on its ability to negotiate these notoriously difficult types of deals and that it will inevitably require the ceding of sovereignty.
Did you know?
The University of Oxford is older than the Aztec Empire. There is evidence that teaching began at Oxford in 1096, while the Aztec city-state of Tenochtitlan was founded in 1325.
House of Commons
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In recess until 3rd September.