17 April 2019

Adam Shaw

17 April 2019

Good morning,

Often, it is the lie covering up the indiscretion, rather than the misdemeanour itself, which lands a politician in hot water.
Bill Clinton was impeached on charges of perjury, due to a sworn deposition in which he denied the true nature of his relationship with Monica Lewinsky.
In 2004, Boris Johnson was sacked from Michael Howard’s shadow cabinet, not because of the revelations which had emerged regarding his personal life, but because he lied about them – initially describing the claims as “piffle”.
More recently, in December 2017, Damian Green was forced to resign as first secretary of state, after it came to light that he had lied about the presence of inappropriate images on his work computer, following his arrest over leaks in 2008.
Yesterday, Richard Burgon MP, shadow secretary of state for justice, became the latest politician to be caught out. It was alleged in 2016 newspaper reports that Burgon, a Labour MP, had once told a party meeting that “Zionism is the enemy of peace”. He addressed this in an interview with the BBC’s Andrew Neil last year, denying the claims wholeheartedly.
However, yesterday, a video appeared on social media, showing he had indeed made such statements. Burgon has since apologised, saying he would not use the "simplistic language" again today. In normal times, one would expect this to be a resignation issue. Lying undermines credibility and our faith in each other. But as is often pointed out, we do not live in normal times. The bar of public discourse has been been lowered in recent years and it is a depressing state of affairs.
I recently finished the book 'A Higher Loyalty: Truth, Lies and Leadership’ by former FBI director James Comey – a look back at his career and his account of what happened up to his dismissal by President Trump
In an early chapter, Comey discusses his time as US Attorney for the Southern District of New York. He talks about the induction he would give to new members of the department, explaining that when they stood up and said they represented the United States of America, people would believe what they said next. This was because of those who had come before them and the reservoir of trust that had been created through hundreds of promises kept and truths told. However, he would also point out that the problem with reservoirs is that they take a long time to fill, but can be drained quickly, through just one hole in the dam.
It’s a good lesson.


Notre-Dame cathedral was just 15-30 minutes away from total destructionduring Monday night’s fire, according to the French government. Thanks to the bravery of firefighters, who risked their lives to save the belfry towers, the majority of the structure and many historic artefacts were saved. President Macron delivered a television address to the nation last night, saying he wanted the reconstruction to be completed within five years. Nearly €1 billion has already been pledged to fund the rebuilding work.
It has been alleged that UK universities are using gagging orders to prevent bullying, discrimination and sexual misconduct allegations from becoming public. According to figures obtained by the BBC, UK universities spent £87 million on pay-offs involving non-disclosure agreements (NDAs) since 2017. This was supported by the testimonies ofdozens of academics, who told the broadcaster that they were “harassed” out of their jobs and forced to sign NDAs after making complaints.
The Telegraph reports that grassroot Tory members believe they are just weeks away from bringing down Theresa May as Conservative leader. The Chairs of local associations are circulating a petition calling for an EGM of the National Convention (the most senior body of the Conservative Party's voluntary wing, comprising 800 high-ranking party officers) to hold a vote of no confidence, a mechanism which has never been used in the party’s history. Although the vote would not force the issue, if passed, it would be devastating to May’s authority. A National Convention EGM must be held if 65 association chairmen sign the petition and, so far, between 40 and 50 are thought to have done so.

Business & Economy

Mastercard is facing the prospect of having to pay £14 billion in compensation to UK consumers after the Court of Appeal overturned a ruling from the Competition Appeal Tribunal, allowing the landmark case to proceed. The case, which focusses on losses suffered as a result of card fees in the 16 years to 2008, is being brought against Mastercard by Walter Merricks, a former Financial Ombudsman, who is claiming damages on behalf of 46 million consumers. Mastercard has said it continues to "disagree fundamentally" with the basis of the claim.
Apple and Qualcomm have reached a deal to end their long-running and expensive intellectual property and contractual disputes, paving the way for Qualcomm chips to be used in the iPhone once more. In a joint statement, the organisations said that the agreement “dismissed all litigation between the two companies worldwide” and included a payment from Apple to Qualcomm. Shares in Qualcomm soared 23.21% following the news.
Official figures have shown that China’s economy grew slighty faster than expected in the three months to March, expanding 6.4% on the first quarter of last year – ahead of the 6.3% which was forecast. This was driven by an 8.5% increase in factory output, an 8.7% rise in retail sales, and fixed asset investment climbing 6.3%. Beijing has taken a number of steps to boost its slowing economy, including tax cuts, while trying not to inflate debt.


What happened yesterday?

It was a strong day for global equities with all major indices making gains.
Positive results financial, healthcare and consumer stocks – Blackrock, Bank of America, Johnson & Johnson, Netflix, IBM and Continental were amongst the organisations reporting figures – drove advances in the US.
The S&P 500 was up 0.05% to 2,907.06, the Dow Jones Industrial Average climbed 0.26% to 26,452.66 and the Nasdaq rose 0.3% to 8,000.23.
Meanwhile, the FTSE 100 ended the session up 0.44% at 7,469.92 – a six month high – and the FTSE 250 gained 0.59% to finish the day at 19,923.38 as the market digested the latest jobs market data and corporate news.
Figures from the Office of National Statistics showed that another 179,000 jobs had been added in the three months to the end of February, leading UK employment to a record high. However, economic growth for the same period remained sluggish, suggesting a continued problem surrounding productivity.
Card Factory was the biggest riser on the FTSE 350, soaring 9.99% after reporting a drop in full-year underlying profit but an increase in revenue, with the retailer facing a “tough” environment.
JD Sports was not far behind, gaining 8.38%, thanks to a 49% increase in revenues and a 15% rise in annual profits.
At the other end of the spectrum, Galliford Try’s shares tumbled 20.54% after the company announced a profit warning on the back of plans to shrink its construction division, with annual pre-tax profit for the year to June expected to come in £30m to £40m lower than analysts’ consensus expectation of £156m.
On the currency markets, the pound was up 0.02% against the dollar at $1.305 and fell 0.02% against the euro to €1.1563.

AFI Development, Amryt Pharma, Serica Energy
Q1 Results
Etalon Group GDR (Reg S)
Trading Announcements
Mediclinic International, SEGRO
Bunzl, Diversified Gas & Oil, Dialight, Drax Group, Hunting, Harwood Wealth Management Group

UK Economic Announcements
(09:30) Consumer Price Index
(09:30) Producer Price Index
(09:30) Retail Price Index

International Economic Announcements
(00:00) Crude Oil Inventories (US)
(10:00) Balance of Trade (EU)
(10:00) Consumer Price Index (EU)
(10:00) Current Account (EU)
(12:00) MBA Mortgage Applications (US)
(13:30) Balance of Trade (US)
(13:30) Building Permits (US)
(13:30) Housing Starts (US)
(15:00) Wholesale Inventories (US)

Columns of Note

The FT’s Big Read by William Walls examines the impact Brexit has had on the population’s mental health, citing NHS figures showing a spike in the prescription and use of antidepressants. First to be affected were, unsurprisingly, EU citizens living in the UK in the immediate aftermath of the vote as feelings uncertainty and not being welcome took hold. However, this has spread to UK citizens with fears regarding the prospect of a no-deal scenario, worries that other problems are not being tackled, and the perception that the country has become a global laughing stock. Despite all this, there has not been a seismic shift in attitudes to Brexit and, if anything, positions appear to have become more entrenched.
Writing in The Guardian, Rafael Behr examines the challenges the Conservative Party will encounter when electing a new leader. The principle issues, he asserts, are the desire amongst the wider population for more state intervention and the view of the Conservative membership that Brexit as a positive, meaning the successful candidate will need to embrace that belief. However, this will make it difficult for whoever emerges as leader to rebuild the Tories’ shredded reputation for financial sobriety and economic competence, opening the door to a Corbyn-led government. Behr concludes that “the choice is between a difficult, honest conversation about the causes of public discontent and an easy, cynical campaign to distil the anger into electoral fuel and ignite it”.

Did you know?

The game Twister was originally called “Pretzel”.

Parliamentary highlights

House of Commons
In recess until Tuesday 23 April
House of Lords
In recess until Wednesday 24 April
Scottish Parliament
In recess until Monday 22 April