22 August

@AdamDShaw

22 August

Good morning,

The UK’s electoral system is “failing to keep up and is undermining the faith voters have that seats in Parliament will reflect the votes they cast”. That is according research from the Electoral Reform Society published yesterday.

Of course, as its name suggests, the Electoral Reform Society approaches this issue with a particular perspective. However, the numbers they set out are stark. Twenty-two million votes cast in June’s general election had no impact on the result, as 68% of people backed candidates that did not win, or chose winning candidates who had already reached the threshold required to be elected. In addition, 6.5 million people voted tactically – “holding their noses” –to support the candidate most likely to beat the one they disliked, rather than voting for who they wanted to win.

A key supporting argument in favour of the first-past-the-post system is that it creates strong and stable governments, to borrow a phrase. But, with two of the last three general elections not producing a majority government, and an increasing number of political parties, is it time to consider an alternative system?

News

President Trump has committed more US troops to Afghanistan as part of a new strategy. In a speech at Fort Myer in Arlington, Virginia, he said that the US will not "nation-build" again and that the focus will be “killing terrorists”. He also called on Nato allies to increase troop numbers “in line with our own” and warned Pakistan that it must do more to tackle terrorist “safe havens”. This marks an about turn for Trump. In 2012, before becoming president, he called for a full US withdrawal from Afghanistan. He also risks upsetting his electoral base after promising that money would be spent at home rather than abroad.

Spanish police have confirmed that a man shot dead yesterday was the perpetrator of Thursday’s van attack in Barcelona which killed 13 and injured more than 130. He was discovered in Subirats, a town 20 miles west of Barcelona, and was wearing a fake suicide belt and carrying knives when police opened fire. All 12 members of the terrorist cell are now either dead or in custody. The investigation into the cell’s international links continues.

Care homes are teetering “on the edge” and a chronic funding shortage means that the NHS is at risk of “catastrophic” failure, according to Dr. Chai Patel, chairman of HC-One – which could become the biggest operator of residential homes if a deal to buy 120 homes from Bupa goes ahead. In an interview with The Times, Dr. Patel said his investors were betting on the need to care for an ageing population with more complex needs.

Business and Economy

Lord Macpherson, who was permanent secretary to the Treasury when the Bank of England began quantitative easing in March 2009, has described money printing as “heroin” for policy makers and urged them to “move on”. In a tweet, Lord Macpherson warned of the dangers, saying: “QE like heroin: need ever increasing fixes to create a high. Meanwhile, negative side effects increase. Time to move on.” 

Ford has launched a scrappage scheme to incentivise UK consumers to trade in old cars, in a bid to improve air quality. Drivers will be offered £2,000 off a new model when they trade in any model of car which is more than seven years old before the end of December. All part-exchanged vehicles will be scrapped, which Ford says will have an “immediate positive effect on air quality”. 

BHP Billiton is “actively pursuing options” to sell its US shale oil business after bowing to pressure from activist investors. BHP Billiton had bought the unit at the height of the market when oil prices were above $100 a barrel, but has come under pressure to spin out the division as oil prices struggle to recover. The sale could bring in $11 billion and investors tentatively welcomed the decision, with the company’s Sydney-listed stock rising 1.3%.

Markets

What happened yesterday?

European stocks fell as tensions between the US and North Korea resurfaced on the back of joint US-South Korean military exercises.

The FTSE 100 was down 5 points or 0.07% to 7,318.88.

Provident Financial fell sharply, dropping 5.78%, after an article in The Sunday Times suggested that hedge funds were betting against the stock.

Barclays and RBS were also down - 1.23% and 0.89% respectively.

However, losses were offset by gains elsewhere. Micro Focus International climbed 3.17% and Anglo American rose 1.17%.

On the currency markets, the pound was up 0.189% against the dollar at $1.2900 but down 0.27% against the euro at 1.0919 euros.

Finals

BHP Billiton 

Interims

AFI Development, Antofagasta, Ossiam Lux Ossiam ETF Shiller Barlcays Cape EU-EUR, Cape, Cairn Energy, Empresaria Group, Hostelworld Group, Inspired Energy, Kenmare Resources, Persimmon, Quantam Pharma, Wood Group (John)

AGMs

Albion Enterprise VCT, Puma VCT 9, Puma VCT 10

UK Economic Announcements

(11:00) CBI Industrial Trends Surveys 

International Economic Announcements

(14:00) House Price Index (US)

(15:00) University of Michigan Confidence (US) 

Columns of note

Writing in The Telegraph, Tim Stanley argues that Donald Trump is far more in tune with ordinary Americans than his critics would like to believe. He points to the decision to pull down statues of Confederate war heroes which sparked protests by white supremacists last week, highlighting that 62% of voters actually back keeping the statues. Stanley contends that this further underlines the gulf between journalists, business leaders and politicians on one side, and ordinary people on the other.

In the Financial Times, George Osborne writes that the Northern Powerhouse fits with Theresa May’s agenda and urges her to pursue it, pointing out that it has the support of northern civic leaders. He outlines the rail requirements he believes are necessary and calls on the prime minister to use the project to help relaunch her premiership this autumn.

Did you know?

Barbie’s full name is Barbara Millicent Roberts.

Parliamentary Highlights

TODAY

House of Commons

In recess until 5th September 

House of Lords

In recess until 5th September

Scottish Parliament

In recess until 3rd September