As hurricane Irma continues to batter the Caribbean, the latest political storm at home is far from blowing over.
Following the first day of debate over the EU Withdrawal Bill, the Conservative government is facing mutiny in its ranks from both sides of the referendum divide. In a bruising five-hour debate yesterday, Dominic Grieve, a pro-Remain MP and former attorney general, called the government’s bill an ‘astonishing monstrosity’. Sources suggest Tories of all colours are now looking to force concessions rather than risk a damaging defeat at such an early stage of the legislation’s passage through parliament.
Within government, a Brexit department minister and Treasury aide are under fire after privately circulating a letter designed to pressurise Theresa May into pursuing the ‘hardest’ of Brexits, including immediate withdrawal from the EU and its associated custom and trade bodies. Pro-Remain Conservative MPs have called for their dismissal.
Add to this the recent comments by Herman van Rompuy, who was European Council president between 2009 and 2014, who said that the likelihood of future trade talks between the UK and EU planned for October was ‘in the neighbourhood of zero’ and the government looks increasingly hemmed in by political cross-winds.
Meanwhile, the American mainland is now bracing for the arrival of the Atlantic’s most deadly storm in history as hurricane Irma leaves a path of devastation in the Caribbean with as many as 13 dead. In a worrying development, two other storms have strengthened to become at least category three hurricanes meaning chaos in the region will continue into next week.
The figures are humbling and far removed from the political to-and-fro at Westminster; a UN estimate suggests that up to 49 million people could be affected by Irma alone.
Prosecutions against black and minority-ethnic suspects should be deferred to help tackle bias in the UK’s criminal justice system, according to Labour MP David Lammy. He warned that young offenders in England and Wales from minority backgrounds will become the ‘next generation’ of adult criminals unless the justice system is reformed, citing figures that BAME backgrounds make up 25 per cent of prison inmates and 41 per cent of the youth justice system.
Donald Trump has said military action is North Korea was not ‘inevitable’ in a foreign policy press conference with the Emir of Kuwait. President Trump previously made aggressive overtures towards military action after recent hydrogen bomb tests by North Korea. Meanwhile, the former Japanese defence minister has suggested they could host nuclear weapons in response to threats from North Korea. This is a major breach of taboo for a country devastated by nuclear technology in recent years and during WWII.
A planned independence referendum for Catalonia on October 1 this year has been blocked by Spain’s Constitutional Court, taking steps to prosecute regional lawmakers backing the ballot. The Spanish prime minister Mariano Rajoy called the vote an ‘intolerable act of disobedience’. Unilateral action by the Spanish regions to secede is illegal under the country’s constitution. The former president of Catalan’s regional parliament, Artus Mas, was barred from office for two years in March for holding a symbolic referendum in 2014. The Catalan government intends to press on regardless.
BUSINESS & ECONOMY
The European Central Bank has left interest rates and its €60 billion-a-month quantitative easing programme unchanged, as it signalled the ‘bulk of decisions’ would come in October. ECB president Mario Draghi set out plans to end its €2 trillion stimulus programme yesterday, sending the euro near to its highest value in two years as investors were buoyed on hopes of ending the seven-year crisis. Economists have suggested an overheating euro could hinder the eurozone’s strengthening growth, which Draghi warned would cut short the bloc’s current export boom.
Bell Pottinger could be put into administration as soon as next week after its financial plight worsened in the wake of accusations that the PR firm launched a campaign to stir up racial tensions in South Africa on behalf of the Gupta family. Mark Smith, Bell Pottinger’s chairman, accompanied by a representative from accountants BDO, briefed the company’s 250 employees on the firm’s financial situation after attempts to find a buyer failed. Co-founded by Lord Tim Bell in the late 1980s, Bell Pottinger has already been expelled from the PR industry trade body for at least five years over the affair.
British Airways faces the threat of strike action on the announcement it plans to close its main defined-benefit pension scheme due to a £3.7 billion deficit. The UK flag carrier announced that it would close the New Airwaves Pension Scheme (NAPS), affecting retirement benefits for 17,000 members, opting for a new fund in which payouts are tied to the performance of investments. Unite and GMB trade unions made veiled threats of strike action in response yesterday, adding to 85 days on industrial action already this year.
What happened yesterday
The euro and European stock markets surged yesterday the ECB’s quantative-easing news, whilst the FTSE 100 also broke its losing streak for the first time this week.
A broad-based rebound saw the FTSE close 42.85 points higher at 7396.98, with insurers jumping on news that the government is to reduce the controversial Ogden rate. This means smaller compensation claims for insurers to pay and higher earnings for the sector. Direct Line and Hastings Group climbed 8 points to 379.6 and 3.9 points to 305.8 respectively, but Admiral slid 37 points to £18.38 after going ex-dividend on Wednesday.
Elsewhere, housebuilders Barratt Developments and Bovis Homes continued to be this week’s big movers with Barratt coming back 13 points at 608.5 points and Bovis Homes gaining 109 points to £11.61 – a 10.4 per cent jump.
ECB president Mario Draghi’s comments meant the pound finished down at €1.09. The euro has already gained 13 per cent this year, prompting suggestions that it could reach parity with the pound during 2017. The pound closed up on the dollar at $1.31.
Adams, Greene King, Masawara, Ortac Resources Ltd. (DI), SimiGon Ltd. (DI), Schroder Rela Estate Investment Trust Ltd, Syncona Limited NPV
UK Economic Announcements
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International Economic Announcements
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COLUMNS OF NOTE
Jeremy Warner has commented in The Telegraph that big businesses’ use of cheap foreign labour and goods sparked the backlash against globalisation and mass immigration which caused Brexit. He suggests this reflects a neglect of companies’ wider social responsibilities, including paying higher wages to mitigate the excesses of the free market.
In The Times, Philip Collins has commented that a Corbynism of the right could emerge, in response to the popularity of Jacob Rees-Mogg and recent shows of strength by Tory backbenchers on Brexit. He suggests the rise of Rees-Mogg’s ideological candidacy has already been foreshadowed by Andrea Leadsom who gained 66 Tory MPs votes in 2016’s leadership election.
DID YOU KNOW?
A U.S. dollar bill can be folded approximately 4,000 times in the same place before it will tear.
House of Commons
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House of Lords
House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL] - 2nd reading - Lord Grocott
Age of Criminal Responsibility Bill [HL] - 2nd reading - Lord Dholakia
Modern Slavery (Victim Support) Bill [HL] - 2nd reading - Lord McColl of Dulwich
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