4 April 2019

Scott Reid

4 April 2019

Good morning,

To quote one of my favourite daily news briefings; “This is not normal”.
We are living through the morning after yet another constitutional record has been smashed by the Brexit bandwagon and this evergreen phrase has never rung so true. But which record, you ask? Good question, there have been a few recently.
For starters, Theresa May’s government has now suffered 33 ministerial resignations in the 22 months since the 2017 general election. This includes two fresh resignations yesterday after Tory ministers found the prospect of May’s lastminute coalition-building attempts with Jeremy Corbyn too hard to swallow. That’s equivalent to 1.5 resignations a month and the most of any the last six prime ministers (a handy graph gives this full flavour).
Or there’s the first tied vote in the House of Commons since 1993. In a ballot on whether to allow MPs a third round of indicative votes on Monday, speaker John Bercow ended up intervening after deadlock set in at 310 votes a piece, guided by constitutional convention to vote for the status quo. The last time this happened? Over Europe and the Maastricht Treaty, of course. Did we ever argue about anything else?
Rounding things off, there was last night’s move by backbencher MPs forcing the prime minister to ask for an extension to Brexit by a single vote. In a hastily debated draft bill that will now proceed to the Lords for approval, the Commons decided 313-312 to prevent a no-deal departure. The key point is that the bill is binding, and has now handed parliament the power to decide the length of any delay.
So all this in the course of one dreary Wednesday in Westminster, which – you’ll be unsurprised to hear – will most likely continue for the next eight days as we try to cobble together some semblance of a plan before no-deal beckons on April 12.
I don’t know about you but I preferred simpler times; when Erskine May wasn’t at the top of my reading list and I could watch the ten o’clock news without fear of having to rethink my morning commentary at a moment’s notice. Less exciting, certainly, but at least we could get on with other things.


BBC News reports that thousands of UK companies have yet to publish their gender pay gap data in a rush to meet a government deadline at midnight tonight. Only about three quarters of private sector employers of organisations over 250 staff who are required to report have so far published their figures, leaving some 2,500 still to do so. The Equality and Human Rights Commission has said it would take action against all those companies that missed the deadline.
Former US vice-president Joe Biden has promised to be “more mindful” about physical contact with women as he addressed allegations of harassment yesterday. He posted a video on his Twitter page saying he would respect personal space in future. Biden has not yet made a formal announcement that he will run for the Democratic nomination in the 2020 US presidential election.
New Zealand police have announced the Christchurch shooter will face 50 murder and 39 attempted charges. The Australian still be may be accused further when he appears in court later today. His attack on the Linwood and Al Noor mosques on March 15 was the worst mass shooting by a lone human in New Zealand’s history.
Research in Scotland has shown that the routine vaccination of women with the HPV vaccine has led to a “dramatic drop” in cervical disease. A team of researchers at Strathclyde, Edinburgh, Aberdeen and Glasgow Caledonian universities have suggested the vaccine has led to a 90% cut in pre-cancerous cells and “exceeded expectations”.

Business & Economy

The former chief executive of Nissan-Renault has been re-arrested in Tokyo for a fourth time over new claims of financial misconduct. Carlos Ghosn was out on bail pending a trial for separate allegations of financial misconduct when prosecutors detained him over suspicions he caused Nissan $5 million in losses. Ghosn denies the allegations.
The governor of the Bank of England has warned that the risk of a no-deal Brexit is now “alarmingly high”. Speaking to Sky News, Mark Carney branded suggestions that such a scenario could be managed as “absolute nonsense”, defending the Bank’s pessimistic forecast that it would result in significant economic shock. He nevertheless hailed “real progress” being made by government, business and the Bank to mitigate likely impact.
Santander has signalled it will pivot towards Latin America and Europe whilst making cuts to its British business as it seeks growth. The Spanish lender yesterday announced a €1.2 billion cost-cutting drive, looking to save around £85 million in the UK via digitisation, automation and continued branch closures. Chief executive of Santander UK, Nathan Bostock, will also step down from the group management committee, which will shrink its members from 24 to 11.


What happened yesterday?

Improving prospects of a soft Brexit led both the pound and the London stock market to six month highs yesterday, whilst continued progress in US-China trade talks also helped momentum. By close of play, the FTSE 100 was 0.37% higher at 7,418.28 points, whilst the pound gained 0.34% on the dollar at $1.32, but remained flat against the euro at €1.17.
Optimism that the government will be able to agree a deal with Jeremy Corbyn’s Labour party was also slightly dented after UK services data showed a contraction in March – the first drop in more than two-and-a-half years, which analysts attribute to Brexit. THE IHS Markit/CIPS UK services purchasing managers’ index was 48.9 in March, down from 51.3 February where anything below 50.0 shows a slowdown.
In corporate news, Babcock International (up 1.7%&) gained as the aerospace and defence group announced that it had appointed former Shell executive Ruth Cairnie as its new chair. Among smaller caps, IP Group (up 3.50%) gained after the FT reported the gene analysis company Oxford Nanopore, in which it has an 18.2% stake, told investors of its plan to seek an IPO within the next year.
On the slide were exporters including Diageo (down 1.29%), Unilever (0.19%) and Reckitt Benckiser (down 0.39%) who all retreated on the stronger pound. They were joined by luxury brand Burberry (down 2.03%) after it was hit by a downgrade from Bank of America Merrill Lynch, who listed the stock as “underperform”.

Concurrent Technologies
HSS Hire Group
Hunters Property
Smart Metering Systems
Brunner Inv Trust
Fondul Proprietatea S.A. GDR
Keras Resources
Leeds Building Society 13 3/8% Bearing Shares
Scottish American Inv Company

Trading Announcements
Pershing Square Holdings Ltd NPV

Annual Report
India Capital Growth Fund Ltd.
Triple Point Social Housing Reit
Intl. Economic Announcements
(07:00) Factory Orders (GER)
(13:30) Continuing Claims (US)
(13:30) Initial Jobless Claims (US)

Columns of Note

An article in The New York Times which has attracted significant attention on UK social media suggests the UK has gone mad. Thomas L. Friedman makes a scathing critique of our recent politics, suggesting the current stalemate is a result of a lack of political leadership - caught between a radical Conservative bloc and a Marxist Labour Party. If something doesn’t intervene soon, he suggests the British political system will “crack up”, inviting serious economic pain.
Martin Wolf writes in the FT that the prospects for Chinese economic growth are finally looking up. He points to renewed optimism in the belief that a trade deal with the US is imminent, ending uncertainty which can clearly be mapped with the onset of the economic slowdown. Doubt remains, however, in Xi Jinping’s support of private enterprise, which Wolf identifies as the motor behind recent success. (£)

Did you know?

In a 2003 survey, one in ten bagpipers said that their passion for the pipes had led to marital breakdown.

Parliamentary highlights

House of Commons
Oral questions
Exiting the European Union (including Topical Questions)
Business Statement
Business Questions to the Leader of the House - Andrea Leadsom
Backbench Business
Debate on a Motion relating to the Introduction of the 2019 Loan Charge - Ross Thomson, Sir Edward Davey, Ruth Cadbury, Dr David Drew, Anna Turley, Caroline Lucas
Debate on a Motion relating to Restrictive Intervention of Children and Young People - Norman Lamb, Anne-Marie Trevelyan, Helen Hayes
Travellers in Mole Valley - Sir Paul Beresford
House of Lords
Oral questions
Current assessment of religious persecution in China - The Lord Bishop of St Albans
Ensuring long-term viability of upland farming - Baroness Jones of Whitchurch
Reducing the number of households in fuel poverty - Baroness Donaghy
Decision by some teachers to take a 20 per cent pay cut in order to prevent staff redundancies - Lord Watson of Invergowrie
Report from the Economic Affairs Committee 'Making Tax Digital for VAT: Treating Small Businesses Fairly'; Report from the Economic Affairs Committee 'The Powers of HMRC: Treating Taxpayers Fairly' - Lord Forsyth of Drumlean
Report from the Communications Committee 'UK advertising in a digital age' - Lord Gilbert of Panteg
Report from the European Union Committee 'Brexit: food prices and availability' - Lord Teverson
Scottish Parliament
General Questions
First Minister’s Questions
Members’ Business
Long-term Decline in Salmon Stocks
Portfolio Questions
Stage 1 Debate
Transport (Scotland) Bill

Financial Resolution
Transport (Scotland) Bill
House of Commons
No business scheduled
House of Lords
No business scheduled
Scottish Parliament
No business scheduled