7 March 2019

Scott Reid

7 March 2019

Good morning,

For a French president whose record unpopularity might in part be down to appearing out-of-touch with the common man, writing in 28 languages in newspapers across Europe to call for a continental “renaissance” is certainly an odd PR strategy for Emmanuel Macron. It doesn’t exactly scream “salt of the earth”.
 
But haters gonna hate, right? If you weren’t enamoured with Macron’s brazen approach to broadcasting his Europhile and metropolitan credentials by now, you probably never will be.
 
All of which seems to be the thinking behind Macron’s latest appeal to votersahead of European parliamentary elections in May. Energised by the “great national debate” he launched in France as a response to the gilets jaunescrisis, Macron made the call for a series of European reforms around three themes: freedom, protection, and progress. His proposals include rethinking the Schengen area, creating a common border and asylum force, negotiating an EU minimum wage, tighter control of digital platforms, and European supervision of digital platforms.
 
His message to Britain was also crystal clear: the “Brexit impasse,” he wrote, proves that “retreating into nationalism offers nothing; it is rejection without an alternative.”
 
But as Simon Nixon notes in The Times today, this appeals to the British way of thinking about Europe more than you might think on first sight. Macron’s previous calls for a eurozone treasury, finance minister and budget were absent from the article, reflecting the feeling among the UK and its fiscally-conservative northern European neighbours, which have since organised themselves under the banner of the New Hanseatic League.
 
Although unlikely, France’s pivot away from seeking political integration for its own sake – and instead focusing on borders and security – suggests that the sort of EU the UK could have been happy to remain within might yet come about.
 
Macron’s message will not have fallen on deaf ears in Westminster. With opposition to Theresa May’s Brexit deal ramping up, and reports that Jeremy Corbyn is in discussions to support a “Common Market 2.0”, a reformed Europe which features an active role for the UK in one way or another, might not be the most outlandish idea we’ve heard yet.

News

The EU has urged the UK to table fresh amendments to the Withdrawal Agreement within the next 48 hours, to break the current impasse. Brexit negotiations stalled again on Tuesday evening after the EU refused to give UK attorney general Geoffrey Cox “reasonable” assurances of a time limitation to the Irish backstop. Talks will resume on Friday and are expected to last into the weekend ahead of the next meaningful vote in the House of Commons on March 12.
 
The UK government has set a new target to source a third of its electricity from offshore wind by 2030. Under the deal announced by the energy and clean growth minister Claire Perry, industry and government will invest £250 million into a new fund dedicated to bolstering the UK supply chain. It is expected to create up to 27,000 jobs in the sector, and will use 60% local content for offshore wind projects. (£)
 
The Times reports that a third of British billionaires now declare residency in overseas tax havens whilst still having contributed up to £5.5 million to UK political campaigns since 2009. According to an investigative report, 28 of the UK’s 98 billionaires have moved overseas, with Monaco, the Channel Islands and Switzerland being the most popular destinations. (£)

Business & Economy

Huawei is to sue the US government over a ban which would see certain Huawei products removed from use by federal agencies over perceived security risks. The Chinese telecoms giant said the US failed to provide evidence for the ban and rejected claims that it was linked to the Chinese government. The US is currently pursuing criminal charges against Huawei CFO Men Wanzhou over allegations of fraud and breaching US sanctions on Iran.
 
The OECD has warned that the UK could enter into recession if it leaves the EU without a deal. The economic thinktank predicted UK GDP growth of just 0.8% during 2019 if a deal was agreed, also warning that a reversion to World Trade Organisation terms would see two per cent taken off growth forecasts over the next two years. Its global growth outlook for 2019 was also downgraded from 3.5% to 3.3%, in response to policy uncertainty and trade tensions.
 
France is to become the first European country to introduce a digital sales tax equivalent to three per cent of revenues for so-called “tech giants”. Under a scheme announced by economy minister Bruno Le Maire, companies with annual global revenues of at least €750 million and French sales of at least €25 million will be required to pay the tax. The levy will apply to revenues rather than profits in a bid to close a tax loophole that incentivises businesses to declare tax overseas. (£)

Markets

What happened yesterday?

The London market put in a mixed performance yesterday, as corporate gains in the tobacco and betting sectors were weighed down by concerns over Brexit and US-China trade relations. By close of trading, the FTSE 100 was up 0.17% at 7,196.00 points, while the pound was down by 0.21% on the dollar at $1.31 and by 0.30% on the euro at €1.16.
 
The day’s headline corporate mover was Paddy Power Betfair (down 2.65%) which announced plans to change its name to Flutter Entertainment, and reported underlying EBITDA of £451 million, which lay at the top end of prior guidance. British American (up 5.15%) and Imperial Brands (up 1.40%) topped gains in the tobacco sector after US Food and Drug Administration commissioner Scott Gotlieb – who was seen as the spearhead of efforts to ban menthol cigarettes – resigned from his post.
 
Insurer Legal & General (down 3.70%) was in the red despite lifting its total dividend seven per cent to 16.42p and reporting 10% growth in 2018 operating profits to £1.9 billion. Analysts were assured by L&G’s future growth prospects, but attributed the selling of its stock to investors cashing-in on some profits after solid recent share price growth.
 
It was joined by food delivery service Just Eat (down 0.03%) which nearly recouped early falls on concerns surrounding its strategy, also posting pre-tax profits during 2018.

Finals  
Admiral Group 
AIREA  
Alfa Financial Software Holdings
Aviva
CLS Holdings    
Cobham          
Cairn Homes
Countrywide   
Funding Circle Holdings
Greggs 
IndigoVision Group      
Informa
Inmarsat          
NMC Health
Spirent Communications         
Total Produce
 
Interims
Inland Homes
Smith (DS)

AGMs
Aluminium Bahrain B.S.C. GDR (Reg S)
Commercial International Bank (Egypt) SAE GDR (Reg S)
Impax Asset Management Group         
Shoe Zone

Annual Report
Relx plc

UK Economic Announcements
(08.30) Halifax House Price Index
Intl. Economic Announcements
(10:00) Gross Domestic Product (EU)
(12:30) Initial Jobless Claims (US)
(12:45) ECB Interest Rate (EU)
(13:30) Balance of Trade (US)
(13:30) Continuing Claims (US)
(19:00) Consumer Credit (US)

Columns of Note

James Marriott writes in The Times that the UK could follow the French example by honouring intellectuals or seeking their service in government office. He laments an abundance of comedians on panel debate shows, and suggest some of our hardest truths may yet be presented by the likes of Rowan Williams, David Runciman, or Zadie Smith. (£)
 
Alex Brummer argues in the Daily Mail that there can be no winners in the battle between Non-Standard Finance and Provident Financial. He suggests that ultimately the consumer would lose out by offering Provident access to private equity, reinforcing the case to keep the sub-prime lender independent.

Did you know?

Donald Duck comics were once banned from Finland due to the title character’s lack of underwear.

Parliamentary highlights

TODAY
 
House of Commons
Oral questions
Digital, Culture, Media and Sport (including Topical Questions)
 
Attorney General
 
Business Statement
Business Questions to the Leader of the House - Andrea Leadsom
 
Select Committee Statement
82nd Report from the Committee of Public Accounts on Windrush generation and the Home Office, HC 1518
 
Backbench Business
International Women's Day - Mrs Maria Miller
 
Opportunities and challenges facing the modern Commonwealth in its 70th year - James Duddridge
 
Adjournment
Regeneration of New Ferry - Alison McGovern
 
 
House of Lords
Oral questions
Reducing the risk of female genital mutilation for girls in the UK and internationally - Baroness Jenkin of Kennington
 
Bringing section 106 of the Equality Act 2010 into force - Baroness Gale
 
Increasing the number of black and minority ethnic women in leadership positions in Russell Group universities in England. - Baroness Falkner of Margravine
 
Humanitarian assistance for women and girls in Yemen - Baroness Hayman
 
Legislation
Civil Partnerships, Marriages and Deaths (Registration Etc.) Bill - Third reading - Baroness Hodgson of Abinger
 
Orders and regulations
European Qualifications (Health and Social Care Professions) (Amendment etc.) (EU Exit) Regulations 2018 - Motion to approve - Baroness Blackwood of North Oxford
 
European Qualifications (Health and Social Care Professions) (Amendment etc.) (EU Exit) Regulations 2018 - Motion to regret - Baroness Thornton
 
Draft European Qualifications (Pharmacists) (Amendment etc.) (EU Exit) Regulations (Northern Ireland) 2018 - Baroness Blackwood of North Oxford
 
Human Medicines (Amendment etc.) (EU Exit) Regulations 2019; Medicines for Human Use (Clinical Trials) (Amendment) (EU Exit) Regulations 2019; Medical Devices (Amendment etc.) (EU Exit) Regulations 2019 - Baroness Blackwood of North Oxford
 
Debate
International Women’s Day - Baroness Williams of Trafford
 
Scottish Parliament
General Questions
 
First Ministers’ Questions

Members’ Business
Settled Status Scheme for EU Citizens in Scotland – Annabelle Ewing
 
Portfolio Questions
 
Scottish Government Debate
Local Government Finance (Scotland) Order 2019
 
International Women’s Day 2019: Balance for Better
 
Committee Announcements
Post-legislative Scrutiny of the Freeedom of Information (Scotland) Act 2002 – Publc Audit and Post-legislative Scrutiny Committee
 
TOMORROW
 
House of Commons
No business scheduled
 
House of Lords
No business scheduled
 
Scottish Parliament
No business scheduled