26 November 2018

Stuart Taylor

26 November 2018

Good morning,

It has been top of her to-do list since she walked through the famous black door of number 10 more than 28 months ago, but yesterday Theresa May was finally able to tick off the task of agreeing terms with the EU on the UK's withdrawal and future relations. 

It took just 40 minutes for the 27 EU leaders to collectively rubberstamp the deal, and just a few seconds more for them to begin posturing over their own individual interests in a future relationship. The Spanish prime minister, Pedro Sanchez, began talking about the idea of "co-sovereignty" of Gibraltar in the coming years, while Emmanuel Macron warned that the UK must compromise in negotiations on fishing if it is serious about getting a trade deal. Both leaders warned they would back a temporary customs union for the whole of the UK if they don’t get what they want.

So although the EU leaders might have handed the prime minister a deal gift-wrapped with a big bow on it, they’ve washed their hands of the now considerable task of helping her sell it to the British people, including those sceptical Brexiteers in the House of Commons.

A parliamentary vote is scheduled for around two weeks’ time, leaving May to embark on a frantic election-style campaign to save the deal, kicking off this morning. She will tour the country, and television and radio studios, over the next fortnight in an attempt to turn the tide of public opinion in favour of her deal. The most eye-catching proposal is a head-to-head prime time debate with Jeremy Corbyn, something the Labour leader has already expressed his “relish” for. 

Not having the numbers to pass the deal through parliament, the PM’s strategy is to appeal directly to the general public in the hope that his will exert the required pressure on MPs to deliver a stunning turnaround.

However, the core difficulty for May remains that the agreed deal seems to please no one. Tony Blair, showing no signs that he has lost his ability to eloquently explain the political situation before us, described to Andrew Marr that we were left with a choice between a “painful” and a “pointless” Brexit, arguing the country either suffered economic damage by leaving the single market or ended up tied to many of the EU’s rules but losing its say.

However, before the PM loses all heart, I reckon her pitch that the deal isn’t all bad and will avoid us going “back to square one” will appeal to at least one demographic of the population: those whom Jeremy Hunt calls the “Bobs” – people “bored of Brexit”.

News

Matthew Hedges, the British academic jailed last week for spying in the UAE, has been issued a presidential pardon with immediate effect. The pardon comes despite the UAE saying it has evidence of Hedges claiming he was a member of MI6 deployed to spy on military systems. 

Tensions escalated on the Black Sea yesterday after Russia rammed a Ukrainian tugboat as it attempted to enter the Sea of Azov through the Kerch Strait, which sits between Crimea and the Russian mainland. It led to a stand-off, which ended with Russia detaining three injured Ukrainian sailors. (£)

Mexico’s interior ministry has said it will deport up to 500 migrants who attempted to storm the US border on Sunday. In a statement, the ministry said the group had tried to cross the border "violently" and "illegally" and would be deported immediately.

Donald Trump’s favoured television channel Fox News is to target “super-fans” with the launch of a new streaming service that will offer on-demand programming from rightwing presenters. Starting tomorrow, Fox Nation will charge $6 per month for opinion-only programming from people including Tucker Carlson and the Donald Trump-supporting Sean Hannity. (£)

Business & Economy

BDO is to merge with accountancy rival Moore Stephens in a move that will create the fifth-largest auditor in the UK, surpassing Grant Thornton. BDO currently sit in sixth place, and Moore Stephens in ninth and the deal will see the new firm generate a combined revenue of around £560m. KPMG are still some way ahead in fourth with revenues of around £2bn in the UK.

A study commissioned by the People's Vote has found that the government's Brexit deal would see the UK £100bn a year worse off by 2030. Analysis by the National Institute of Economic and Social Research found that GDP would shrink by 3.9% annually, “the equivalent of losing the economic output of Wales or the City of London". 

A court in Milan is considering charges of corruption against energy giants Eni and Shell after a controversial oil deal led to Nigeria losing an estimated $6bn. The campaign group Global Witness found that the OPL 245 deal in 2011 deprived Nigeria of double its annual education and healthcare budget.

Markets

The week ahead

The week-long German CDU conferences get underway on Tuesday as the battle to replace Angela Merkel as party chair begins in earnest. The three contenders for the position are Annegret Kramp-Karrenbauer, CDU secretary-general, Jens Spahn, federal health minister, and Friedrich Merz. An early poll has Merz – a previous party adversary of the German chancellor – ahead of Ms Kramp-Karrenbauer, a centrist who is seen as Ms Merkel’s natural heir. The first conference is Böblingen and there is a conference every day before it finishes in Berlin on Friday. 

It’s a busy week for the US Federal Reserve too. The minutes from last month’s meeting will offer clues on the possible trajectory of Fed policy, as will chair Jay Powell’s address later that evening to the Economic Club of New York Signature Luncheon with a speech entitled “The Federal Reserve’s Framework for Monitoring Financial Stability”. On Wednesday, six current Federal Reserve policymakers will gather to discuss the way to an inclusive US economy.

Companies announcing financial results this week include Abercrombie & Fitch, HP, Britvic, Ikea, and Tiffany.

Finals
Sanderson Group
 
Interims
Augmentum Fintech
Cake Box Holdings
D4T4 Solutions
Fusion Antibodies
Kainos Group
Palace Capital
Polar Capital Holdings
Sysgroup

AGMs
JPEL Private Equity USD Equity Shares
Mila Resources

Int. Economic Announcements  
(09:00) IFO Business Climate (GER)
(09:00) IFO Current Assessment (GER)
(09:00) IFO Expectations (GER)
(09:30) BBA Mortgage Lending Figures

Columns of Note

In his weekly column for The Sunday Times, Kevin Pringle writes that austerity really is a matter of life and death. Citing Professor Philip Alston’s report that a fifth of people in the UK live in poverty, Pringle says the report should have dominated the political and news agenda for days but, like so many issues of public importance of late, has been pushed out by coverage of Brexit. (£)
 
Writing in the FT, Janan Ganesh outlines his plan to get more people to visit museums. Ganesh says that cities are suffering for the fact that most museums are only open during working hours and will only come into their “own when ‘nightlife’ means more than one thing”. (£)

Did you know?

The Trinidad Moruga Scorpion chili, the world’s hottest chili pepper, is so potent it can burn its way through protective latex gloves. The golf-ball sized pepper measured 1.2million units on the Scoville scale, which measures the pungency of chilis and other spicy foods. To put that in context, the extra-hot sauce you find in Nando’s, clocks in at 35,000 units on the scale.

TODAY
 
House of Commons
Oral questions
Defence (including Topical Questions)
 
General debate
100-year anniversary of the Royal Air Force

House of Lords
Oral questions
Plans to split payments in Universal Credit - Baroness Sherlock
 
Importance of the Appledore shipyard as part of the UK's future shipbuilding strategy - Lord West of Spithead
 
Impact of plans for Verify, the Governments Digital Service's digital identity system - Lord Clement-Jones
 
Requiring organisations to produce action plans to respond to their gender pay gap reports - Baroness Prosser

Scottish Parliament
No business scheduled

TOMORROW

House of Commons

Oral questions
Health and Social Care (including Topical Questions)
 
Ten Minute Rule Motion
Minimum Service Obligation (High Street Cashpoints) - Huw Merriman

House of Lords
Oral questions
Developing mental health support in schools - Lord Storey
 
Ensuring planned local government fair funding allocation will provide local authorities with the resources needed to provide sufficient and effective local services - Baroness Pinnock
 
Current rules governing the taxation of offshore gambling businesses used by citizens of the UK - The Lord Bishop of St Albans
 
Free TV licences for those of 75 - Lord Stevenson of Balmacara

Scottish Parliament
Ministerial Statement 
The interim findings of the UN Special Rapporteur on Extreme Poverty and Human Rights on UK poverty

Scottish Government Debate: Hear Me Too: 16 days of activism to end violence against women and girls