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?
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