4th November 2019

Written by Scott Reid, Associate Partner

Edited by Laura Hamilton, Managing Partner

Good morning,

Michael Gove is a memorable man for many reasons. He sports a plummy Scottish accent which is increasingly rare on the government benches; a proclivity for backstabbing which is, alas, less so; and – for a left field suggestion – he has a surprisingly canny knack for being able to read the mood of the nation. “This country has had enough of experts”, he seethed back in 2016. It’s a quote some of us may wish to banish to the history books, much less adorn in the downstairs loo, but one which has summed up our country’s angry, if maddening, attitude to government ever since. And alive and well it remains today. According to a new study conducted by YouGov/Bristol University and trailed in the Financial Times this morning, economists are among the least trusted professionals by the UK public – worse than scientists or medics, but just as bad (shocker) as any journalist or politician. The survey’s juiciest morsel is in how that mistrust divides along voting preference. Whilst just 25 per cent of Remain voters don’t trust economists to make fair and accurate predictions, that figure is doubled and a majority among Leavers, who also felt by two-fifths that economists’ views were “mainly” political opinions. But are they wrong? Weren’t us naysayers wrong after all? Discounting a couple of headline manufacturing exits from the UK, a hit to the London property market (which for many homeowners outside the capital is probably a net positive), and the blindingly obvious fact that we are yet to Brexit, it's fair to say the sky hasn’t fallen in since June 2016 and the UK’s mediocre performance has continued along its merry way to a state of managed decline. Keep calm and carry on, folks. Continuing my challenge to received wisdom, then, might the big danger in our immediate post-Brexit futures actually be an uptick in the economy? Think about it. The Tories win the election, a deal is passed, life continues much the same as before. Sure, the UK might dwindle into irrelevance over the medium to long term as we get passed over for trade deals, but hardly quick enough to warrant a run on the banks. Those that chose to disregard reasoned evidence were proven right, and so have licence to parry any challenge to whatever their latest mad idea might be with the unassailable logic that, “yeah, but didn't you say that last time?” Somehow, I’m not hopeful that five more weeks of an election campaign will do the nation’s grey matter much favours. Nor indeed our economic prospects. Today’s survey results on our antipathy for reason might show that Gove was correct after all. But that doesn’t make him right.


The Resolution Foundation thinktank has found that public spending is likely to reach levels not seen since the 1970s during the next parliament. Basing research on the main parties’ public spending commitments to date, the Foundation found that the Conservatives would raise annual spend on public services as a share of GDP by 41.3% in 2023-24 and Labour by 43.3%. Shadow chancellor John McDonnell has suggested a Labour government would scrap plans for a third runway at Heathrow Airport. McDonnell said climate change was the party’s “number one priority”, and that Heathrow’s plans “clearly [do not] qualify” for party targets around reductions to noise and carbon emissions. Labour has pledged that the UK will be carbon neutral by 2030. Donald Trump has threatened to cut US federal funding to help curb wildfires in California after becoming embroiled in a Twitter spat with the state’s governor. In response to claims by President Trump that California comes to ask for federal help “every year”, Governor Gavin Newsom responded “You don’t believe in climate change. You are excused from this conversation”. Fires which are currently ablaze in the state have so far destroyed nearly 100,000 acres.

Business and economy

Saudi Aramco has confirmed its intention to list on Riyadh stock exchange in what is expected to be the world’s most valuable initial public offering. Sources suggest shares are expected to be available for the value of one or two per cent of existing company shares with a speculated total value of about $1.2 trillion. The company said it has no current plans for a foreign share listing, saying that a two-stage IPO had been shelved.

KPMG will cut a tenth of its UK partners by Christmas subject to performance reviews. The one-off job cuts, totalling around 65 posts, are part of £100 million cost cutting measures which also include the potential closure of its Mayfair members club, recalling employees mobiles, and a further cull of a third of personal assistant roles. The firm is said to be preparing a strategic overhaul which will focus on further investment in its accounting division. (£)

McDonalds has removed its chief executive Steve Easterbrook with immediate effect following his admittance to a relationship with a colleague. Easterbrook is credited with having roughly doubled the company’s share price since his appointment in March 2015. The firm has appointed its US business president, Chris Kempczinski as chief executive and group president.


The week ahead

UK politics will remain in the limelight this week, kicking off with the election of a replacement to John Bercow as Speaker of the House of Commons later today, and followed by a meeting of the Bank of England Monetary Policy Committee on Thursday. Although the November Budget, previously scheduled for Thursday, has been cancelled, the Office for Budget Responsibility will give a short update on the progress of accounting for the March budget. In international politics, Spain will hold a general election on Sunday. Prime minister Pedro Sanchez looks set to lose seats according to opinion polls following a campaign marked by intensifying demonstrations in Catalonia. This week will also see headline earnings reports from Marks and Spencer, J Sainsbury, Associated British Foods and Ryanair. Sainsbury’s, which failed in its bid to take over rival Asda, will be scrutinised by investors on Thursday, when investors will be interested in any change of strategic direction, including speculation over subsidiary Argos store closures, the status of its bank, and cuts to company pensions contributions

What's happening today?



UK Economic Announcements

(09.30) PMI Construction

Intl. economic announcements

(08.55) PMI Manufacturing (GER) (09.00) PMI Manufacturing (EU) (15.00) Factory Orders (US)

Columns of note

The Times’ Quentin Letts gives a run-down of the candidates running to be selected by MPs as the next Speaker of the House of Commons later today. He surveys former Labour minister Chris Bryant (the race’s most intellectual), former deputy Labour leader Harriet Harman (the most likely to emulate John Bercow in style), and lesser known Conservative MP Dame Eleanor Laing (unlikely to command cross-party support), but concludes that the race is deputy speaker Sir Lindsay Hoyle’s to lose. (£) In the Financial Times, Pilita Clark looks at Unilever’s plans to roll out its executive share scheme with middle managers and lower-paid workers. Early results showed that twenty per cent of workers chose to put their entire bonus into company shares, whilst twenty per cent - overwhelmingly lower-paid works - opted for entirely fixed pay. She suggests Unilever’s flexible approach reflects contemporary economic need and could be a flier among other conglomerates. (£)

Cartoon source: The Telegraph

Did you know?

By 2022, there is predicted to be 3 internet-connected devices per person on Earth.

Parliamentary highlights

House of Commons Election of Speaker Statements by candidates and election of new Speaker presided over by the Father of the House House of Lords Introduction(s) Baroness Wilcox of Newport and Baroness Blower Oral questions Arrangements for upholding environment protection and standards between leaving the EU and the establishment of any new regulation regime - Baroness McIntosh of Pickering Assessment of the National Biodiversity Network report 'State of Nature 2019' - Baroness Miller of Chilthorne Domer Recruitment by universities of EU students on courses longer that 4 years and their visa eligibility - Baroness Garden of Frognal Universities adoption of the International Holocaust Remembrance Alliance definition of anti-semitism - Lord Leigh of Hurley Debate Government’s international development work to promote the sustainable use of natural resources and prevent biodiversity loss - Baroness Jenkin of Kennington Scottish Parliament No business scheduled TOMORROW House of Commons Oral questions Foreign and Commonwealth Affairs (including Topical Questions) General debate Opportunity for Members to make short valedictory speeches Matters to be considered before the forthcoming Dissolution Adjournment Provision for special educational needs and disabilities in Suffolk - Sandy Martin House of Lords Introduction(s) Lord Choudrey and Baroness Ritchie of Downpatrick Oral questions Prevention of malnutrition among people in health and social care setting - Lord Aberdare Guidance to the housebuilding sector in order to reduce of the number of accidents within the home - Lord Jordan Assessment of the recommendations of the report of the Digital Competition Expert Panel ' Unlocking Digital Competition' - Lord Clement-Jones The appearance in England of tick-borne encephalitis virus and advice given on Borreliosis bacteria and associated Lyme disease - Lord Greaves Civil Partnership (Opposite-sex Couples) Regulations 2019 - Baroness Williams of Trafford Short debate Impact of the convergence of gaming and gambling on gambling-related harm in the UK - Lord Chadlington Scottish Parliament Topical Questions (if selected) Stage 1 Debate UEFA European Championships (Scotland) Bill Election to the Scottish Parliamentary Corporate Body Committee Announcements

Members’ Business Save Loch Lomond – Ross Greer