The Month That Was……November 2019

General Election, Farage, party politics, Brexit, the NHS, manifestos, Brexit again, economic boom if we get Brexit done, taxes, more Brexit……a political soup that appeals to few. But to fix the economy, we must fix the politics.

I will forever remember this month for Nicky Morgan (the current Culture Secretary) and her amazing power of maths……I have £10 in my wallet today and will have £10 more tomorrow by simply not spending the first one. Then if I can convince that £20 to stay another day I’ll be up to £40 the day after.

This is the political message that voters are up against (see below: It’s Been A Bad November For……Option 3).

Elsewhere, here’s how November 2019 will be remembered……

 

Festive Farage Frolics

UK politics feels like death by a thousand cuts……the third General Election in 4 years.

Standing in front of Number 10, the man who wanted a General Election, who campaigned for a General Election, who voted for a General Election and whose party voted for a General Election informed all that he didn’t want a General Election. You still with me?

Is there anything BoJo won’t say to get what he wants? Anything? To be fair, the same could be said for many in politics. Sad, but true.

It seems to me that any party that manages to get within touching distance of the ‘not completely useless’ level in their General Election campaign will probably win. I fear that no party will get remotely close though.

All you need to know about UK politics is summed up in one man……enter stage left……Nigel ‘Flaky’ Farage.

After 7 failed attempts to become an MP, Flaky Farage announces he won’t be running for election. Yet he will be his political party’s leader during the campaign.

He then states his party will not contest any seat that the Tory’s won in the last General Election (thus reducing the threat of the Conservatives losing seats). This was declared just 48 hours after he met with The Trump and a further day after a peerage was ‘offered’. Lord Farage…..just let that sink in for a minute.

UK politics summed up perfectly……the power and threat of just one man that isn’t even running for election.

In a bizarre twist……this increases the prospect of a hung parliament being avoided, the Conservatives gaining enough seats to form a majority Government and their Brexit deal getting over the line at the end of January 2020.

But then you remember the loose cannon that is BoJo and all bets are off. 

What a bloody mess.

NHS Battle Ground

Aside from Brexit, the NHS is clearly the battleground that parties have chosen to attack.

Why?

Firstly, we spend more on the NHS than ever before. In 2018 more than £156 billion was spent on health across the UK. It means about 30p out of every £1 spent on public services goes on health.

Secondly, the performance of NHS services is getting worse as a consequence of the austerity cuts over the past decade.

Thirdly, the UK population is ageing. Medical advances have meant that people are living longer. When the NHS was created, life expectancy was 13 years shorter than it is now.

Fourthly, the NHS is one of the largest employers in the world and is the biggest in Europe (with over 1.3 million staff). Which means a lot of voters work there!

Recession Sidestep

The UK economy dodged the recession bullet…….just. In fact, by the smallest possible margin and at the slowest annual rate in almost a decade.

Clearly the economic situation caused by the political uncertainty around Brexit is painful. Very painful. But the idea of the UK economy being ‘officially’ in recession would have compounded the issue and sent negative shockwaves around the world.

If the General Election doesn’t provide a political solution in the first quarter of 2020, expect recession to come knocking again.

Worrying times.

Bonkers Brexit #1

A really interesting piece in the Financial Times looked at the cost of Brexit not happening during 2019. The civil service ‘mobilised’ for a no deal Brexit on 29^th March, 12^th April and 31^st October in a kind of sick, twisted and vile economic / political game. Thousands moved out of their usual day jobs into planning……to then be told to stand down again each time.

Aside from the human and economic cost (and worldwide political embarrassment cost), there is an actual cost to the taxpayers. For example, the Government has spent £100 million on communications during the campaign for Brexit on 31^st October on everything from roadside adverts for lorry drivers to TV / Radio ads.

However, this seems ‘chicken feed’ in comparison to the total spend for 2019……£6.3 billion. That’s……£6,300 million. Or as I like to write it (for pure drama) £16,300,000,000.

And what do we have to show for it?

Bonkers.

Bonkers Brexit #2

Australia and others ask for Brexit trade compensation.

A decent swell of companies have asked for trade compensation from the UK and the EU over Brexit disruption. Fifteen countries (including Australia, US, India and New Zealand), set out Brexit concerns at a World Trade Organisation (WTO) meeting in Geneva.

The main issue for the 15 countries is a system which allows them easier access to the EU's large market for limited quantities of some of their goods, mainly farm produce.

It's a system known as "tariff rate quotas". World Trade Organisation members generally apply taxes / tariffs on imports to many of the goods they buy from abroad. For some products they have made commitments to allow specified amounts to be imported with taxes / tariffs that are lower than what they usually apply (in some cases the reduced tax / tariff is zero).

It makes it more profitable for Australian farmers to sell beef to Europe, for example.

Brexit complicates this.

The current quotas are for the whole of the EU, the UK included. Brexit means the UK and the EU have to decide how to divide them up.

Some countries say that could lead to them having less of the favourable access than they currently have to what is a large and wealthy market. Hence the reason for compensation.

Just for the record, The Trump is arguing that the US could end up with no access to pizza cheese at reduced tariff rates.

Bonkers.

China v US……continued

Trade tensions between the US and China continue at great pace as the prospects of a resolution seem pretty pessimistic. The Trump is reluctant to roll-back existing tariffs……he’s all ego and won’t take a step back for the greater good.

But China is clever……very clever in comparison to The Trump. To be fair, my 5 year old daughter is.

There is more than one way to arm wrestle……enter The People’s Bank of China and their decision to cut the lending rate for the first time since 2015.

Chinese authorities basically altered monetary policy at a time when it is locked in a trade dispute……it was Beijing’s way of letting the US know they can fend them off in the trade battle with one hand, while tweaking monetary policy with the other.

Clever. Very clever. Let’s see what The Trump’s next move is.

It’s Been A Bad November For……Option 1 – Prince Andrew

You know it’s a bad month when your Mum sacks you from doing anything further in public such is the outrage on many, many levels.

No further questions your honour.

It’s Been A Bad November For……Option 2 – Nigel Flaky Farage

Throwing stones from a distance and stirring up anything he can get a spoon in is all well and good if it fits an agenda. But not having the courage to then stand in a public forum to let the public decide if your ideals are what the masses want is simply cowardly and lacks courage.

But are we really surprised? 

It’s Been A Bad November For……Option 3 – Nicky Morgan

BoJo’s pledge to boost the NHS with another 50,000 nurses secured big headlines but quickly came under fire when it included 19,000 nurses who already work in the NHS but are considering leaving.

Culture Secretary Nicky Morgan was wheeled out into the public and tried to defend the 50,000 figure during an appearance on Good Morning Britain but simply couldn’t get the maths to stack up. How could she……but she tried relentlessly!

If you haven’t seen it, look it up. It is TV gold……just not for Nicky Morgan.

https://www.youtube.com/watch?v=CpcY6HsGmAM

(start at 3:30 / 22:36)

And Finally……

The Conservatives raised £5.7 million in the first week of the official General Election campaign, according to the Electoral Commission. Labour raised a total of £218,500, the Lib Dems received £275,000 and the Brexit Party £250,000. The difference is quite astonishing!

The Month That Was……October 2019

 

In 50 years time, teenagers will study these past 4 years as part of their modern history studies. It will form part of the curriculum and a generation of poor cardigan wearing history teachers (yet to be born) will have to explain and make sense of our political system and its behaviour towards Brexit.

 

They will also have to explain the background and behaviour of the most powerful person in the world and how they ruled over the US (and the rest of the world for that matter) during the same 4 years.

 

Those history teachers will be cherished sons and daughters……yet they will be laughed at and ridiculed. Those history teachers will lose all credibility as none of their students will believe them. Those teachers will need long term therapy.

 

I urge you to embrace these times as we are the witnesses that must pass these true accounts to the next generations.

 

The history teachers are counting on us.

 

What a time to be alive.  

 

Here’s how October 2019 will be remembered……

 

 

Nightmare on Downing Street

I have just enough will, just, to recap the nightmare goings on (politically) in the leadup to Brexit on Halloween……or not as the case is. Who’d have thought it!

 

So, in case you lost track……

 

BoJo spent many days flexing his political biceps to a packed EU crowd and negotiated a quite remarkable deal. It looked like Theresa May’s previous deal, smelt like it, barked like it, wagged it’s tail like it……only the deal was worse and MP’s voted and agreed to it.

 

What BoJo didn’t plan for was the next bit……debating and arranging the legislation to adopt the deal into UK law. BoJo basically negotiated / arranged / built a car engine with no car to put it in. Darn……so close.

 

Whatever you think about Brexit or the BoJo deal, allowing MPs under 48 hours to read, understand, judge & then vote on a course of action that will alter the social, political and economic future of the UK for generations to come is both reckless and undemocratic. But that’s BoJo for you.

 

So……no deal, no Brexit and no resolution……but we do have a ‘flextension’ until the end of January.  

 

Just to recap……3 ½ years, three extensions, seven defections, 21 deselections, three prime ministers, countless amendments, two prorogations, one Supreme Court judgement, 66 million Brits losing the will to live and we’re at……square one.

 

John Bercow described Brexit as being “in Limbo”, on the basis that MPs have spent every day since the referendum gradually lowering the bar.

 

Only one thing for it then……

 

With a couple of days on their hands in the lead up to Halloween, MPs voted against a pre-Christmas General Election. Then the next day they decided they did want one. Then they had an argument as to whether it should be on either a Monday or Thursday of the same week.

 

Date for the diary then……12 December 2019 for the third General Election in 4 years (the first in December since 1923).

 

Regardless of the day, the likely result of the General Election is another hung parliament just a few weeks before the new extension runs out. What exactly will that achieve?

 

Clearly BoJo believes Brexit will definitely be solved by a slightly different minority government. Clueless stuff.

 

Please stop the UK bus……I want to get off now. I’m done.

 

 

US Presidential Election #1 - Peachy President

The impeachment of The Trump is gathering quite some pace and it’s a snowball that shows no signs of getting smaller.

 

To understand the situation a little more, it is worth stepping back and considering the wider picture for The Trump.

 

Firstly, his approval rating stands at just 43% in the US and no President has ever got re-elected on such a low figure. Given that he is just over a year away from the election, the figure will cause him to stir to action.

 

Secondly, his election opponent is likely to be either Elizabeth Warren or Joe Bidden. Elizabeth Warren is seen as way too radical a choice for traditional Democrats, leaving Joe Bidden as the likely sparing partner in the Presidential Election. He is seen as safe hands and is more voteable (he is the former Vice President to Barak Obama).

 

Add the two together and you start to understand why The Trump is trying to cash in political favours in order to discredit potential threats to winning a second term (even if this is using Presidential powers for personal political benefit).

 

Bizarrely, if the impeachment investigation clears The Trump’s name, he will get a huge approval rating increase and it will probably lead to a second term. The joy.

 

 

US Presidential Election #2 – China in Your Hands

The political and economic fight that The Trump seems to be enjoying will see the detrimental impact to the US economy magnify over the next year. It is almost impossible to get re-elected when in recession (or close to it)……and The Trump knows it.

 

The average tariff on Chinese imports in the US was 8% in 2018, which will have risen to an average of 26% by December 2019 if no action is taken.

 

This explains why The Trump performed a huge U-turn in October by agreeing to stop a proposed 5% tariff increase on certain imports and he brokered a huge soya bean trade agreement that will see the largest country of soya bean harvesting (US) sell to the biggest consumer of such a product (China). Who’d have thought it!

 

Not only did The Trump tweet about the amazing deal……but he did it in capital letters……so it must be really good (or he left the caps lock on……which is probably more likely).

 

The truth is, the trade war and tariffs are still there, very real and the situation is currently more of a temporary truce than a significant resolution.

 

Given that economic stability is key to re-election, expect more of the same as the months tick by.  

 

 

Royal Retirement Ramble

The Queens Speech unveiled new pension legislation……super interesting in my world.

 

Firstly, there is to be a state-sponsored digital pensions dashboard that allows people to see all their retirement arrangements in one place for the first time. The hub will allow users to track their savings on smartphones and other devices in a move designed to make it easier to calculate how much people need to save.

 

Secondly, executives who plunder pension schemes or run them into the ground will face up to seven years’ imprisonment.

 

Charles Counsell, Chief Executive of the Pensions Regulator, said that new criminal sanctions and civil fines would “act as a strong deterrent against risky and reckless behaviour, giving us flexibility to issue fines at the appropriate level”.

 

And that was it. A bigger slap on the wrist for ‘wrong’uns’ and a smart new app to confirm what a disappointing retirement looks like for many.

 

I expected more. I wanted more. We deserve more.

 

 

Joyless Germany

Germany is the leading candidate for a recession currently, which should alarm us all. The issue is that 47% of its economic performance comes from exporting goods and ‘the world’ is simply buying less German goods.

 

Germany’s economy makes up 30% of the total EU economic performance, which is a big deal given they are our largest trade partner.  

 

To make matters worse, The Trump has ‘a thing’ for luxury German cars being imported to the US. Expect tariffs in the future and his next big spat being with Mrs Merkel  

 

 

October’s Biggest Loser……Option 1 – Thérèse Coffey

Thérèse Coffey, the Work & Pensions Secretary, called the new Pension Legislation (see Retirement Ramble above) “the next crucial step in making Britain the best place in the world to retire”.

 

Call me sceptical but a new app (which is a decade late) and bigger penalties for the reckless does not make “Britain the best place in the world to retire”.

 

She is clearly drunk, deluded or desperate.

 

Don’t believe the hype.

 

 

October’s Biggest Loser……Option 2 – Ken Clarke

When discussing BoJo’s new negotiated Brexit deal, MP Ken Clarke (Tory royalty since 1970) described it as "a very bad deal" and “worse than Theresa May's dog's breakfast"!

 

And get this……he voted for it.

 

Is it just me or is it very uncool that the UK’s political future could be determined on the basis of “let’s just get it done because we’re bored”.

 

Hang your head in shame Mr Clarke.

 

 

October’s Biggest Loser……Option 3 – Chris Grayling

The new Transport Secretary (Grant Shapps) has negotiated and awarded Government contracts of £87 million to ferry companies to transport medicines in the event of a no-deal Brexit.

 

Brittany Ferries, DFDS, P&O and Stena Line will be able to deliver those supplies from 31 October 2019, aimed at making sure deliveries of vital products continue if the UK leaves the EU without a deal.

 

Under the previous Transport Secretary (Chris Grayling), the UK paid £51 million to cancel no-deal ferry contracts with companies that had no ferries.

 

Chris Grayling is no longer Transport Secretary……his legacy is cemented though.

 

 

And Finally……

In a joint press conference with the Italian President, The Trump claimed that America’s relationship with Italy goes back “thousands of years”. Well, I’m pretty sure Columbus only set sail around 500 years ago. What next……the Colosseum in Rome is in fact Trump Tower?

The Month That Was......September 2019

Brushing aside the deluge of overly proud parents flooding social media with the compulsory pictures of anyone under the age of 18 returning to education in their overpriced shiny shoes (OK – I’ll come clean – I conformed with the masses!), it has been difficult to avoid the subjects of Brexit, ‘politics and the economy.

 

It makes absolutely no difference whether you are bored with it, agree with it, understand it, voted for or against it……Brexit and the resultant political and economic consequences has slapped you in the face every day throughout September.

 

Not even the prospect of The Trump being impeached or the start of Strictly could budge BoJo from our screens / radios / newspapers.

 

So how will September 2019 be remembered?

 

 

BoJo KO Legally So

I will forgive you if you have given up with where we are up to with the whirlwind that is Brexit, politics and the economy. It’s a tangled knot with far too many players who have their own rules to untangle the chaos.

 

The current position with the economy is pretty straight forward……little or no economic growth has left the UK close to recession as there is little overseas confidence or investment on the back of 3 years of little progress in exiting the EU nicely.

 

The current position with Brexit is pretty straight forward also……little or no political stability has left the UK close to political meltdown on the back of 3 years of adolescent bickering by those paid to represent us.

 

The politics bit is less straight forward but the most important part. To get the economy right, we have to get the Brexit deal right. But to get the Brexit deal right, we have to get the politics right. So, let’s recap September 2019 in Westminster……

 

 

BoJo closes Parliament for 5 weeks so that he can increase the risk of a no-deal Brexit, put the heebie-jeebies up the EU and ride off into the sunset with a Brexit deal to save the UK.

 

This annoyed too many MP’s and the Supreme Court ruled that it wasn’t lawful to stop Parliament carrying out its duties in the run-up to the Brexit deadline on 31 October 2019.

 

Just consider that for a minute……our Government breaks law and its actions have to be stopped to uphold our democracy. That is legal, constitutional and political dynamite normally reserved for emerging nations. Unprecedented, extraordinary, ground breaking.

 

Perhaps what was more surprising is the number of MP’s that complained about not being able to do anything for five weeks when they have done absolutely nothing since June 2016!

 

Having been able to actually do their jobs, MP’s then press ahead with a Bill to stop no-deal happening on 31 October. It gives BoJo until 19 October to either pass a deal in Parliament or get MP’s to approve a no-deal Brexit. After this deadline, he would have to write to the EU asking for an extension to the UK's departure date from 31 October 2019 to 31 January 2020.

 

BoJo has previously said he would “rather be dead in a ditch than negotiate a Brexit extension”. Oh, dear.

 

BoJo then sacked 21 MP’s from his own party for voting in favour of the Bill and against his wishes……how dare they. More MP’s then resign in protest of the sackings including BoJo’s brother Jo Johnson. In his resignation, JoJo said that it was in the national interests to resign (rather than support his own brother!).

 

Or to put that another way, BoJo’s brother sacks himself to spend less time with his family. What next……Stanley Johnson resigning as BoJo’s dad and defecting to the Milibands?

 

Such was the chaos at this time, an amendment to legislation actually happened by accident. Farcical.

 

BoJo then flexed his muscles by challenging Labour to the General Election they had been asking for……for 2 years! But Jez Corbyn declined, ran away and hid behind legislation fearing that it was a trap to allow BoJo the opportunity to allow the UK to crash out without a deal.

 

Still with me?

 

In summary……

 

BoJo tried to stifle democracy by suspending Parliament illegally, got his writs slapped by the Supreme Court, had to apologise to the Queen, caused chaos in his own party, lost his small majority in Parliament, lost the backing of his brother, lost every vote he has put to the House of Parliament and now has the UK further away from Brexit.

 

Not a great start is it BoJo?

 

As I said earlier……to get the economy right, we have to get the Brexit deal right. But to get the Brexit deal right, we have to get the politics right. What hope do we have when politics is hampered by too many agendas that are all wrapped up in hundreds of years of law and rules that can be whipped out to feed an agenda at any stage?

 

It’s been 3 years, 3 months, 1 week and 1 day since the referendum result……and counting.

 

 

QE or Not To QE……That Is The Question

The lack of Brexit progress is also impacting the economic position of the EU (our biggest trade partner). A no-deal Brexit weighs heavily on both sides of the water.

 

In response, the European Central Bank (ECB) has cut interest rates to a record low and restarted quantitative easing in an effort to revive the eurozone economy.

 

In a widely expected move, Mario Draghi (ECB President) announced a significant stimulus programme to pump more cheap credit into the economy and encourage lending. The deposit rate was cut by 0.1 per cent to minus 0.5 per cent and the ECB will begin a €20 billion a month bond buying programme in November.

 

3 years, 3 months, 1 week and 1 day and still counting.

 

 

Government Rejection #1 - Thomas Cooked

The past month has offered an insight into why most British Governments have avoided bailing-out the private sector. You see, once you help one business, everyone looks for it.

 

Thomas Cook provided a unique predicament for the Government. The 155,000 people on holiday with the travel company needed to be brought home somehow. If it does go bust, then the Government will have to lead the biggest repatriation of British people since Dunkirk at an estimated cost of £600 million. Perhaps this is why Thomas Cook’s plea for Government support seemed to gain little traction.

 

From a business perspective, there was little logic in helping Thomas Cook. The company was in difficulty after a series of poor decisions over the past decade, including ill-judged expansion on the high street, brutal cost-cutting and failing to tackle its debt more quickly. It also operates in a rapidly changing industry where the launch of online rivals such as Expedia and the growth of budget airlines such as Ryanair has transformed how we book holidays.

 

Then add in the fact that the taxpayer-owned Royal Bank of Scotland is one of Thomas Cook’s lenders……it adds to the complications.

 

At a time when a General Election looks highly likely, the Government choosing the least damaging option seems far from a surprise!

 

 

Government Rejection #2 – Serious Minerals

No sooner had it emerged that the Government had rejected a plea from Thomas Cook for state support then Sirius Minerals was next in line seeking help.

 

There is more sense in saving Sirius Minerals. The project to develop a mine in North Yorkshire for a type of potash fertiliser is more of a national strategic asset than Thomas Cook. The project eventually could produce a valuable mineral that will be exported and boost UK trade (projected to be worth $29 billion by 2030).

 

Whilst there is scepticism about the quality and quantity of the minerals that the project can deliver and construction is complex and risky, the project already sustains hundreds of highly skilled jobs in the North East and will help to regenerate the local area.

 

For those sceptical about why the Government should support the project, consider this: what happens if a sovereign wealth fund or rich investor from another country takes it on? Given the slump in the company share price and the fall in the value of the pound, some are sure to be running the rule over the project. Qatar’s sovereign wealth fund and Gina Rinehart, the richest woman in Australia, are already investors.

 

Whilst many will say that the Government should steer clear of interfering in the private sector, the UK also needs to be smart. Much of our infrastructure is already in the hands of foreign state-run companies or international funds, including trains, water, and electricity suppliers. Is it really that wild to consider putting UK support into Sirius?

 

 

Trump Dump?

Well, it’s official……The Trump will be the fourth President in history to face an impeachment investigation.

 

Despite flirting with the idea for some time, there now appears to be some mud that may actually stick.

 

The issue stems from a phone conversation between The Trump and Ukrainian President Volodymyr Zelensky. The transcript of the call shows that The Trump pressed his Ukrainian counterpart to investigate former Vice-President Biden (and potential opponent in the next year’s Presidential Election) who was a board member for a company owned by a Ukrainian oligarch.

 

The Trump’s request came after the US had confirmed that it was delaying releasing US military funds to Ukraine until mid-September. Hmmmmm.

 

This controversy once again highlights the blurred lines between the ‘personal’ and the ‘official’ that has frequently typified the Trump White House.

 

The big question to answer is whether The Trump used the Presidential powers for personal political benefit?

 

 

September’s Biggest Loser……Option 1 – BoJo

His only task was to get the UK closer to leaving the EU. We are not only further away, but we are now a laughing stock internationally. You know it is bad when American’s are laughing at how bad our leader is. 

 

The situation is so bleak that it makes Theresa May’s tenure look almost creditable. Almost.

 

 

September’s Biggest Loser……Option 2 – Dominic Cummings

Let’s be honest, BoJo isn’t the brightest of buttons and is simply a semi-likeable chap (to some) who fronts the ideas of those around him.

 

The most forceful of those is Dominic Cummings (BoJo’s Senior Adviser), a ruthless political strategist who was director of the official Leave campaign in the 2016 referendum and is viewed as a disrupter who has brought a win at all costs mentality to delivering Brexit.

 

As BoJo’s biggest influencer, he must share the biggest portion of the blame at the current mess.

 

 

September’s Biggest Loser……Option 3 – Peter Fankhauser

See ‘Thomas Cooked’ above.

 

The signs were there a number of years ago when Thomas Cook Shareholders opposed the company’s plan to pay Chief Executive Peter Fankhauser long-term bonuses. Despite this, he has £4.6 million of bonuses outstanding and he is legally entitled to them.

 

Bonuses for failing……completely legal and acceptable……apparently.

 

 

And Finally……

Such is the chaos with our Politics that BoJo could actually trigger a vote of no confidence in himself to spark a General Election. As bizarre as that sounds, would you bet against it?