19 November 2018

Stuart Taylor

19 November 2018

Good morning,

If Theresa May wants to save her Brexit deal, it might be wise for her to buy every copy of the Financial Times in Westminster this morning in an effort to hide content that will be a red rag to her most bullish Eurosceptic colleagues.

For the paper has splashed on the news that a diplomatic note shows that Michel Barnier, the EU’s chief Brexit negotiator, has proposed the idea of extending the transition period for Britain’s exit until as late as the end of 2022, more than two years longer than currently planned.

The idea itself seems sensible, granting both the UK and the EU more time to adjust to the new relationship and a longer period to strike a future trade deal that works for both parties. However, not for the first time, the politics of it all could thwart common sense

Such an arrangement would come with caveats. Free movement of people would continue, as would the payments being made by the UK to the EU bloc, which diplomats have calculated at €10bn-€15bn a year. Significantly, both arrangements would still be in place when the next general election takes place and it’s difficult to see the Conservative party going to the polls under such conditions.

The other difficulty for the prime minister is much more immediate. She was at pains during a television interview yesterday to warn the rebels in her party that it was “her deal or no deal” and that manoeuvres to oust her from Downing Street would only serve to frustrate and possibly delay the UK’s exit. 

We will hear more from the PM today when she addresses business leaders at the CBI annual conference, against a backdrop that finds 80% of companies having already slashed or postponed investment because of the risk of a no-deal exit.

May will then head to Brussels – perhaps as early as tomorrow – to finalise her withdrawal agreement. With the EU shutting the door on any hope that the divorce deal can be amended, extending the period for leaving may be the last dynamic in play.

News

Universities are to be encouraged by ministers to introduce two-year degrees in an attempt to reduce costs for students. The proposals expected to be put before parliament would grant universities the ability to raise annual fees to £11,150 for fast-track degrees, bringing the cost over two years to £22,300, more than £5,000 less than the cost of three-year degrees. (£)

France's president, Emmanuel Macron, has said Europe "has the obligation not to let the world slip into chaos" and has called on closer ties with Germany. Speaking in Germany’s parliament, Macron backed the idea for a more integrated EU, complete with a joint eurozone budget, and called for a European army

The US and Mexico have installed heavier security at the border of a Mexican town after hundreds of residents took to the streets in protest at the arrival of thousands of migrants trying to get to the US. The migrants are part of a large caravan of Central Americans who have been travelling through Mexico to Tijuana in the south of California, where they hope to claim asylum.

 Business & Economy

Debbie Crosbie has been appointed TSB’s new chief executive. Crosbie will join the challenger bank after 20 years at Clydesdale Yorkshire Banking Group (CYBG), where she was most recently the bank's operations chief. She will take over the role vacated by Paul Pester in the new year.

Edward Bramson, the activist investor who has demanded Barclays curtails its investment banking ambitions, has threatened to seek a place on the board if he is ignored. Bramson’s Sherborne Investors became one of the largest shareholders in Barclays this year, with a stake of more than five per cent. However, the bank is showing no signs of acting on Bramson’s demands to cut back its investment banking business. 

Apple’s CEO Tim Cook has said that the free market is not working when it comes to protecting privacy and conceded that regulation for the tech industry was now “inevitable”. His comments follow a series of data scandals and will fuel the simmering tension between Apple and Facebook. (£)

A survey by the property website Rightmove has found that the price of homes put up for sale so far in November were typically more than £5,000 lower than they were last month. The results suggest that parts of the market are cooling and sellers are lowering their expectations in the face of Brexit uncertainty. (£)

Markets

The week ahead

The CBI annual conference gets underway today, with Brexit likely to dominate proceedings. Carolyn Fairbairn, the organisation’s director general, has backed last week’s withdrawal agreement on the basis that it would take the possibility of a ‘no deal’ Brexit off the table, something she considers would be “a disaster for this country”. 

On Tuesday, Saudi Arabia’s King Salman will make his first public speech since the death of Saudi journalist Jamal Khashoggi last month when he makes his annual address to the Shura Council advisory body. Also on Tuesday, EasyJet, Europe’s second-biggest low-cost airline, will post its latest financial results.

Wednesday and Thursday see a host of companies release corporate earnings, including Babcock, ThyssenKrupp and Centrica. Finally, expect news bulletins on Friday to broadcast scenes of shopping chaos as people compete for bargains on Black Friday. The day might be too frenzied for all but the most hardened shopper, but for the retailers Black Friday continues to be a pivotal time as they look to close the year on a high.

Finals
Diploma

AGMs
Tau Capital
TR European Growth Trust 

Interims
Sirius Real Estate Ltd.
 
Intl. Economic Announcements
(09:00) Current Account (EU)

Columns of Note

Kevin Pringle, writing in The Sunday Times, says that the most damaging thing Brexit has achieved so far is to destroy Britain’s reputation for competent government, and that this will having a lasting impression when it comes to a second referendum on Scottish independence. (£)

The FT’s Rana Foroohar writes that Silicon Valley faces a reckoning similar to that experienced by banks after the financial crisis. In views that echo the comments of Tim Cook, Foroohar says that the tech industry cannot be trusted to rein itself in and that the era of platform technology companies being protected from criticism and regulation by the complexity of their products and services is coming to an end. (£)

Did you know?

Almost every American flag at Disneyland has the wrong number of stars on it. This means they are exempt from abiding by the US Flag Code, and do not ever have to be lowered at night or flown at half-mast.

Parliamentary highlights

TODAY

House of Commons
Oral questions
Work and Pensions (including Topical Questions)

Legislation
Consideration in Committee of the Finance (No. 3) Bill - Day 1
 
House of Lords
Oral questions
US government's decision to withdraw from UN Relief and Works Agency - Lord Polak

Mammogram facilities which offer breast cushions to relieve pain during scans - Baroness Massey of Darwen
 
Government plans to introduce new domestic abuse legislation - Lord Bassam of Brighton
 
Review of the Teaching Excellence Framework and the inclusion of recommendations on changes in the percentage of first class and upper second class degrees - Lord Stevenson of Balmacara
 
Scottish Parliament
No business scheduled

TOMORROW

House of Commons

Oral questions
Business, Energy and Industrial Strategy (including Topical Questions)

Ten Minute Rule Motion
Electric Vehicles (Standardised Recharging) - Bill Wiggin

House of Lords
Oral questions
Introduction of a national register of convicted stalkers. - Baroness Gale
 
Food security post-Brexit in the event of no deal reached between the UK and the EU - Baroness Smith of Basildon
 
Roll-out of SMET2 smart meters. - Lord Lennie
 
Requests for safe passage, resettlement and granting of asylum to Asia Bibi and her family - Lord Alton of Liverpool

Debate
Statement made by the Prime Minister in the House of Commons on Thursday 15 November relating to the EU exit negotiations - Lord Callanan

Scottish Parliament

Ministerial Statement: Implementation of Best Start Grant

Scottish Government Debate: Developing Scotland’s Digital Industries for our Economic Future