28 August

@ScottReid1992

28 August

Good morning,

As the end of the parliamentary recess looms, the Brexit battle lines are being redrawn and it seems Labour are finally gearing up for the fight.
 
Writing for The Observer yesterday, Labour’s shadow Brexit secretary, Sir Keir Starmer, announced a major policy shift by backing continued membership of the EU single market and customs union during a lengthy ‘transition period’ when Britain leaves the EU in March 2019. The shift positions Labour firmly as the party of ‘soft Brexit’, squaring up policy with the many Remain-voting supporters it picked up in June’s General Election and setting the stage for a more direct clash with government.
 
The announcement strikes a more unified tone for the party, coming less than two months after Labour leader Jeremy Corbyn – a career-long Eurosceptic - sacked three front bench ministers for supporting exactly this policy motion against the Queen’s Speech.
 
As parliament returns to session next week and David Davis arrives in Brussels for the latest round of Brexit talks, the move demonstrates that Labour’s top-flight are getting serious on getting things done in this parliament if they are to present themselves as a future party of government after - or even before - Brexit.
 
Pro-EU Tory MPs, who also support remaining in the single market, will be put under intense pressure to fall in behind Labour’s position and rebel against their own party should the need arise. The columnist and former Tory minister,Matthew Parris, for example, suggested he could vote Labour for daring to make such a ‘bold’ move.
 
No doubt they will be cheered on by campaigners for a more liberal Brexit deal – or a second referendum – including Labour’s Chuka Umunna and Lord Adonis. If a motion were forced, who knows how much cross-party traction a much hinted at scaled-back proposal for leaving the EU could have? The tide may be turning.
 
As Brexit rumbles closer, expect many more battles ahead before the deal is done. 

NEWS

Hurricane Harvey has left a wake of extreme flooding across Texas with Houston, the US’ fourth-largest city, particularly affected. Parts of Houston and its suburbs got as much as 50 inches (1.3 meters) of rain, the highest amount ever recorded in Texas, affecting 6.8 million people in 18 counties across the state. President Trump plans to go to Texas on Tuesday to survey damage from the storm, receiving criticism for a lacklustre response so far.
 
A new drug has heralded a breakthrough in the fight against heart disease, as a trial showed repeat heart attacks reduced by a quarter. The medicine, which targets the body’s natural inflammatory response to illness as a way of reducing the risk of heart attack, costs £40,000 per patient per year and is currently offered as an arthritis treatment. The development was hailed as signalling a ‘new era of therapeutics’, working alongside statins, and shifting scientific enquiry away from cholesterol as a main symptom of heart disease.
 
Hundreds have been treated at Beachy Head, Sussex, after a ‘mysterious chemical mist’ left people with severe health reactions, prompting an evacuation of the local area. Emergency services were called to Birling Gap at about 5pm yesterday and Eastbourne District General Hospital has so far treated 223 people with ‘chemical haze’ symptoms. A local business has attributed the incident to a ‘chlorine gas leak’. 

BUSINESS AND ECONOMY

Britain’s so-called ‘divorce bill’ is expected to emerge as a sticking point, as David Davis returns to Brussels today for the latest round of Brexit talks. Reports have suggested that ministers are ready to pay up to €40bn (£36bn) as the price of getting on with trade talks. The EU has yet to budge on its position of discussing subsequent matters – including the future UK-EU relationship – until matters such as the budget, citizens’ rights and the Northern Irish border are settled.
 
Sir Steven Webb, director of policy at Royal London and former pensions minster, has said that up to £1 trillion was contained in deferred pension rightsin Britain with current regulations being neglected by employers. Research led by Webb shows that only 10 per cent of schemes inform members of their dues, with four in five not alerting members to early retirement opportunities. Legislation is due to change at European level from March 2019, just before Britain leaves the EU.
 
The board of Uber, the ride-services company, has appointed Dara Khosrowshahi, the chief executive of Expedia, as its own new chief executive. Khosrowshahi’s appointment comes after months of negotiations, with the new chief exec charged with repairing frayed relations with policy makers, investors and building a profitable business after seven years of losses. He follows Travis Kalanick, Uber’s outspoken co-founder, who was ousted as CEO in June in response to shareholders’ concerns over his behaviour and that of senior managers.

MARKETS

The week ahead
International negotiations and economic data are on the agenda this week, hoping to give an indication of future direction in policy for some members of the G7.
 
On Monday, China ‘Big Four’ state-owned commercial banks report their second-quarter earnings, with analysts predicting meagre advances of 1-2 per cent. The banks have slowed new lending this year as authorities promote deleveraging after years of breakneck credit growth.
 
German economic strength, and its leadership among the Eurozone economies, is expected to be underlined on Wednesday as the latest inflation figures are released. Last month, inflation was 1.7 per cent, growth accelerating in the second quarter, and unemployment remaining at a post-reunification low, which will be a boon for Chancellor Angela Merkel as she approaches federal flections in September.
 
Meanwhile, Theresa May arrives in Japan for the latest of her Brexit ‘trade offensives’. The Japanese prime minister Shinzo Abe is likely to press Mrs May to soften the impact of Brexit on Japanese companies, where she will be sounding out potential for a future trade deal with Japan.
 
Donald Trump’s economic record, and future plans, are in the spotlight from Friday as the latest US employment data is released, and negotiators from the US, Canada and Mexico gather in Mexico City to start the second round of NAFTA talks on updating the 23-year old agreement. Economists expect US hiring to have cooled in August, and markets will be watching the talks closely, given Trump’s threats to pull the US out of the accord. 

Finals
OPG Power Ventures

International Economic Announcements
(09:00) M3 Money Supply (EU)

COLUMNS OF NOTE

In yesterday’s Sunday TimesKevin Pringle reflects on the political uses and abuses of the latest GERS figures in Scotland. He argues against complacency for politicians of all stripes; suggesting that the latest indicators of the nation’s economic health demonstrate Scotland’s own individual challenges, but should not be seen as any ringing endorsement of Scotland’s place in Britain’s economic union. As Brexit begins to bite, Pringle suggests politicians need to rethink an over-reliance on the status quo of Britain’s over-centralised macroeconomic policy, and get Scottish finances standing on their own two feet.
 
Nathalie Nougayrède comments in The Guardian on Emmanuel Macron, suggesting the beleaguered French president must go beyond ‘cosmetic’ policy making in Europe in order to rescue his faltering popularity at home. As the standard bearer for liberalism across Europe, Nougayrède argues his cause is only undermined by pandering to flamboyant populist gestures, and instead he should get down to the tough task of domestic economic reform before European leaders will take his ambitions on the EU stage seriously. 

DID YOU KNOW?

It takes about 700 grapes to make one bottle of wine.

PARLIAMENTARY HIGHLIGHTS

House of Commons
In recess until 5th September

House of Lords
In recess until 5th September

Scottish Parliament
In recess until 3rd September