26 October 2018

Tom Gillingham

26 October 2018

Good morning,

Late yesterday morning I was at the IET for John McDonnell's pre-budget speech. While it was unsurprisingly broad, it did offer useful insight into the Shadow Chancellor's thinking ahead of one of the most significant annual events in the political calendar.

With the headline-grabbing drama of Brexit occupying so much of political life, it is sometimes easy to forget that domestic government carries on. But Mr McDonnell, slightly bruised after an altercation with a pile of rubbish, seems to be in a pugilistic mood ahead of Monday.

He dedicated a significant portion of his speech to the apparently fraught relationship between the Prime Minister and her Chancellor. An interesting preoccupation it would seem, given the complexity of his own relationship with old friend Jeremy Corbyn.

Labour finds itself in something of a conundrum at the moment but Mr McDonnell stuck doggedly to the problems afflicting the Conservatives. The Shadow Chancellor will be well aware that opinion polls are resolutely refusing to budge in Labour’s favour, despite a broadly positive conference and the Conservatives' ever-present Brexit travails.

More worryingly for Labour, Jeremy Corbyn still trails Theresa May in the "Who would make the best Prime Minister" stakes (with a nod to Don't Know's strong campaign to date) and, tellingly, his popularity may also be on the wane amongst the previously key 18-24 demographic. If the fickle winds of popularity continue to blow against the current Labour leader, it would be hard to bet against John McDonnell having one eye on the top job. 

In the meantime, McDonnell’s speech was also notable for his emphasis on the coming 'fourth industrial revolution'. He cited the lack of industrial robots in the UK, compared to other developed nations, as a contributing factor in our productivity struggles, and as evidence that not enough was being spent on modernising the UK economy. Labour, he said, would make digital and automation investment a major priority in its next manifesto, and how this squares with union concerns about job losses will be an interesting subplot to watch.

While the Budget offers a chance for Chancellor and Shadow Chancellor to go head-to-head across the Chamber, it's impossible not to wonder whether Mr McDonnell is simultaneously preparing a trip hazard of his own for the man he sits next to on the opposition benches.


Lord Hain has defended naming Sir Philip Green in the Lords yesterday. Mr Green is the anonymous businessman a newspaper had accused of sexual and racial harassment, but a court injunction prevented the Daily Telegraph identifying him in their report. The peer used parliamentary privilege to reveal the retail tycoon's name, saying it was the "right thing to do". Philip Green denies the allegations.

Rising sea levels will claim homes, roads and fields around the coast of England, according to a new report from the Committee on Climate Change. It also said that current plans to build defences are unaffordable and not fit-for-purpose, meaning many people are unaware of the risks they face.

The investigations into the explosive packages sent to a number of prominent critics of Donald Trump continue today. US federal specialists are stepping up their search for a suspect after Vice President Joe Biden and actor Robert De Niro the latest to be targeted. So far, none of the ten identified devices have exploded, meaning the authorities have significant forensic material to work with.

Business & Economy 

Google Chief Executive Sundar Pichai says the company has sacked 48 employees, including 13 senior managers, over sexual harassment allegations over the last two years. He used a letter to employees to say the internet search giant was taking an "increasingly hard line" on sexual misconduct. This news came as Google shares fell sharply. Even though the search giant posted a third-quarter profit that exceeded expectations, the company's revenue just missed Wall Street's financial target.

The Treasury Select Committee has called for an overhaul of Britain’s approach to small business lending (£) after the “scandalous” treatment of companies by banks. MPs said there is an urgent need for commercial loans to be regulated to prevent a repeat of the abuse of thousands of SMEs faced after the financial crisis.

British Airways has admitted that an additional 185,000 sets of personal data may have been stolen during a high-profile cyber attack last month (£). This follows the previous revelation that over 380,000 payments may were compromised at the end of August and the start of September. This new group of British Airways website users are now being informed of the breach.


What happened yesterday?

Poor performance by leading tech stocks dominated another mixed day for international markets. Amazon shares fell by 8% after the online retailer reported that its quarterly net sales rose to $56.58 billion, up from $43.74 billion the year before, but still missing analyst estimates of $57.1 billion.

Google parent also Alphabet missed analysts’ estimates for third-quarter revenue, resulting in its stock falling 4.7%. This poor performance also impacted other leading companies in the sector. Reacting after hours, Netflix dipped 3% and Facebook, which reports its own results next week, lost 2.3%

Despite these jitters, the S&P finished the day up by 1.86%, at 2705.57, but there are concerns that a fall in Asian stocks could impact any positives today.

The FTSE 100 continued its slow rally from lows earlier this week, ending the day up by 0.59% at 7,004.10.
Continuing pressure from the spectre of a no-deal Brexit meant the pound fell very slightly against both the Dollar and Euro at 1.2818 and 1.1271 respectively.


Q3 Results
International Consolidated Airlines Group SA
Royal Bank of Scotland Group

Argos Resources Ltd
K3 Capital Group        
Paternoster Resources
Springfield Properties

International Economic Announcements
(13:30) GDP (Preliminary) (US)
(15:00) U. of Michigan Confidence (US)

Columns of Note

Writing in the Evening Standard, former Senior Policy Advisor to David Cameron, Rohan Silva, pays tribute to Sir Jeremy Heywood. Britain's most senior civil servant is stepping down due to ill health, and Mr Silva says he will be sorely missed due to his work rate and attention to detail.

In the Guardian, Polly Toynbee claims that the Prime Minister cannot rely on the 'phoney' loyalty of her pro-Brexit MPs. Despite describing her 1922 committee appearance as a great escape, the commentator goes on to say the claim that the Brexit deal is 95% done does not stand up to scrutiny.

Former Austrialian Prime Minister, Tony Abbott, writes for the Spectator on how he believes Brexit can be saved. He says that, from an Australian perspective, it is hard to understand how Britain has made such a mess of proceedings.

Did you know?

Cows have regional accents like humans, according to language specialists at the University of London.

Parliamentary highlights


House of Commons


Homes (Fitness for Human Habitaiton) Bill – remaining stages – Ms Karen Buck

Civil Partnerships, Marriages and Deaths (Registration etc.) Bill – remaining stages – Tim Loughton

Organ Donation (Deemed Consent) Bill – remaining stages – Mr Geoffrey Robinson

House of Lords


Health and Social Care (National Data Guardian) Bill - Second reading - Baroness Chisholm of Owlpen

Duchy of Cornwall Bill [HL] - Second reading - Lord Berkeley

Prisons (Interference with Wireless Telegraphy) Bill - Second reading - Baroness Pidding

Children Act 1989 (Amendment) (Female Genital Mutilation) Bill [HL] - Committee stage - Lord Berkeley

Scottish Parliament 

No business scheduled