Whatever side of the Brexit fence you are on, a major problem with the UK’s departure process from the European Union has been its onerous and all-consuming nature, depriving all other policy areas of oxygen. This is reported to frustrate Theresa May, who is said to have a reforming zeal and a strong desire for her premiership not to be defined solely by Brexit. She may be left wanting.
However, earlier this week, there were signs at last of much needed government action to address two of the long-term crises facing the country – social care and housing – reflecting May’s stated intention to set out a domestic agenda that will keep her in power beyond Brexit.
The plan contained in the Conservative Party’s 2017 general election manifesto to address social care – dubbed “the dementia tax” – went down poorly and was a key factor in the Tory failure to secure a majority. It was quickly dropped. However, the general principle, that an ageing population with increasing care costs means people will have to more adequately prepare for later life, was arguably correct.
Last month, in a Whitehall kite flying exercise, it was reported in the Sunday Telegraph that plans were afoot for a Care ISA, which would be exempt from inheritance tax to incentivise people to keep the funds to pay for care, rather than spending their savings.
However, it was quickly pointed out that 19 out of 20 estates pay no inheritance tax, meaning an inheritance tax break would be irrelevant for most savers.
The new plan, revealed in an interview with Matt Hancock in The Telegraph, is a new system of insurance modelled on auto-enrolment pension schemes, through which people would have to opt-out of making payments. This is expected to feature in a forthcoming Green Paper.
On housing, Theresa May yesterday pledged an extra £2 billion for Housing Associations to build new homes and stated that she wishes to remove the “stigma” of social housing. Whilst critics claim that this falls far short of what is required, it was given a cautious welcome by stakeholders, and James Brokenshire, the housing minister, has set out further action he intends to take.
Neither of these issues will be fixed overnight. But this week’s announcements are at least steps in the right direction after years of inaction.
Theresa May pressed her fellow EU leaders to focus on agreeing a Brexit deal within the next two months at yesterday’s gathering in Salzburg, saying negotiations will not be extended. At a dinner, the prime minister told her counterparts that her priorities are maintaining economic and security ties and the status of Northern Ireland, and urged them to consider her Chequers blueprint – which she stressed is a “serious” set of proposals – to avoid a no deal scenario.
Back at home, Theresa May’s political weakness was once again laid bare. Sir Mike Penning, one of her most loyal allies, stated that the Chequers Plan is “dead as a dodo”. Meanwhile, an internal Conservative Party memo assuming that the prime minister will be forced to stand down “soon after March 2019” and detailing the strengths and weaknesses of potential successors was leaked to The Telegraph. Tory MPs are reported to be sharing the memo amongst themselves as they openly discuss May’s future on Whatsapp.
Two people were killed and several others were hospitalised as Storm Ali struck the British Isles yesterday. A man died and another was injured after being hit by a falling tree in a country park in Northern Ireland, and a woman was killed when her caravan was blown off a cliff in the west of Ireland. The storm also caused serious travel disruption and power outages.
Business & Economy
A review designed to transform Britain’s railways has been announced by the Department for Transport, with Chris Grayling admitting that the structure of the railways system is “no longer fit to meet today’s challenges”. The announcement follows the conclusion of a three-month inquiry by the Office of Rail and Road (ORR), which found that Network Rail, the DfT, Northern Rail, Govia Thameslink Railway, and the ORR itself all made mistakes which led to the collapse of services during the implementation of a new timetable in May.
Aston Martin will seek a valuation of between £4 billion and £5.1 billion when it floats on the London Stock Exchange next month. The luxury car manufacturer has set the price range for ordinary shares, which will begin trading on 3 October, at between £17.50 to £22.50 each. Twenty-five per cent of its shares will be sold in the offer, with the option to sell a further 10 per cent, and a full prospectus will be released later today.
Three water companies will face greater scrutiny from the Consumer Council for Water after reporting poor customer service records, following a probe into action taken after the “Beast from the East” storm disrupted supply. Bristol Water, SES Water and Southern Water – which collectively have 3.5 million customers – have been told by the watchdog to provide quarterly reports highlighting the action they are taking to reduce complaints.
What happened yesterday?
Global stocks performed strongly yesterday, with most major indices making overall gains.
In the US, the S&P 500 ended the day up 0.13% at 2,907.95. It had risen as high as 2,912.36 at one point – fractionally short of the record closing high of 2,914.04 set at the end of August – but fell in later trading.
Meanwhile, the Dow Jones Industrial Average ended the session up 0.61% at 26,405.76 – it’s highest level since January. However, the Nasdaq fell 0.08%.
Closer to home, the FTSE 100 gained 0.42%, closing at 7,331.12. Mining companies led the way due to the price of metals rising on the back of strong demand, despite fears of a US-China trade war. Antofagasta rose 5.87% and Anglo American was up 5.05%. Fresnillo, Evraz, Glencore, BHP Billiton and Rio Tinto also performed strongly.
Kingfisher was the day’s biggest faller, shedding 6.3%, after the retailer reported a 30% drop in profits during the first half. The retail group, which owns B&G amongst others, is half way through a five-year turnaround programme and Véronique Laury, chief executive, said the company is “on track to deliver our strategic milestones for the third year in a row,” but acknowledged that “the outlook for our main markets continues to be mixed”.
On the currency markets, the pound fell 0.01% against the dollar to $1.3141 and was down 0.08% against the euro at €1.1249.
Brooks Macdonald Group, Diurnal Group, Inland Homes, Kier Group
The City Pub Group, French Connection Group, Hvivo, Lamprell, Modern Water, Safestyle UK, Soco International, Science in Sport, Scisys, Summit Therapeutics, Venture Life Group
Adrian Silver Corporation (DI), Auto Trader Group, Anglesey Mining, Begbies Traynor Group, Diageo, First Property Group, IG Group Holdings, Kainos Group, Petro Matad Ltd., Ryanair Holdings, Safeland, Twentyfour Income Fund Limited Ord Red, Cambium Global Timberland Ltd.
UK Economic Announcements
(09:30) Retail Sales
International Economic Announcements
(13:30) Continuing Claims (US)
(13:30) Initial Jobless Claims (US)
(15:00) Existing Home Sales (US)
Columns of Note
Ahead of the Labour Party’s autumn conference, Jim Pickard uses the Financial Times Big Read to look at Labour’s summer of infighting and questions whether the 2017 general election was the high watermark of Jeremy Corbyn. He highlights the issues of Brexit, Corbyn’s world views, anti-Semitism, the prospect of some incumbent MPs being deselected, and the potential for any new centrist party, concluding that – despite government weakness – the next general election will not be easy for Labour.
Writing in The Times, Gerard Baker examines whether President Trump’s decision to initiate a US-China trade dispute is a move taken from his own “The Art of the Deal” or Sun Tzu’s “The Art of War”. He contends that, whilst Trump’s apparent belief that all trade is a zero sum game has led to a focus on trade imbalance – the one consistent aspect of his presidency – the move could be part of a more overarching strategic goal of disentangling the US economy from its global competitor.
Did you know?
China used more cement between 2011 and 2013 than the US used in the entire 20th century.
House of Commons
In recess until 9 October 2018
House of Lords
In recess until 9 October 2018
First Minister’s Questions
Ministerial Statement: NHS Tayside Board
Scottish Government Debate: Violence Reduction in Scotland - progress and future priorities
No business scheduled